Covered Call Return Calculator
This calculator shows what a covered call earns if the stock stays flat (static return) and if it's called away (if-called return), plus annualised figures.
Static return is 2.0% (24.3% annualised); if called away it's 6.0%. Breakeven is $49.
Educational estimate, not advice.
How it works
Returns are measured against the stock price and annualised by days to expiration.
- Static return = P ÷ S
- If-called return = (P + max(K − S, 0)) ÷ S
- Annualised = return × 365 ÷ D
- Downside protection = P ÷ S
- Breakeven = S − P
Worked example
Stock $50, $52 call, $1 premium, 30 days: static 2.0%, if-called 6.0%, annualised static ≈ 24.3%, breakeven $49.
Limitations
Annualised figures assume you could repeat the trade at the same terms, which isn't guaranteed. Ignores dividends and fees.
Questions
What is a good covered call return?
It depends on the stock's volatility; higher returns come with higher risk of the stock falling.
What does if-called mean?
The return if shares are assigned at the strike at expiration.
Does it include dividends?
No — add them separately if you expect one.
Related
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