Covered call calculator
A covered call means you own 100 shares and sell someone the right to buy them at the strike. Enter what you paid for the shares, the strike and the premium to see your best case, your breakeven and what you still risk.
New to this? Read Covered calls explained for beginners.
Worked example
Example numbers
You own 100 shares bought at $40 and sell 1 call at the $45 strike for $1.50.
At expiration: stock at $35 → shares down $500, plus $150 premium = −$350. Stock at $43 → call expires worthless, shares up $300, plus $150 = +$450. Stock at $50 → shares are likely called away at $45, so +$500 + $150 = +$650. The extra $500 of upside from $45 to $50 is not yours.
How the math works
- Max gain = (strike − your share price + premium) × 100 × contracts (minus fees).
- Breakeven = your share price − premium.
- Max loss = (your share price − premium) × 100 × contracts, if the stock fell to $0.
FAQ
What is the max profit on a covered call?
The strike minus what you paid for the shares, plus the premium, times 100 shares. With shares at $40, a $45 strike and a $1.50 premium, that is $650 per contract.
What is the breakeven on a covered call?
Your share price minus the premium you collected. $40 − $1.50 = $38.50 in the example.
Can you lose money on a covered call?
Yes. The premium only cushions the drop by the premium amount. If the stock falls below your breakeven, you lose money on the position, and the shares can fall all the way to zero.
What happens if my covered call is assigned?
Your 100 shares are sold at the strike price. You keep the premium. Assignment can happen before expiration on American-style options, often around ex-dividend dates.
What if I sell a strike below what I paid?
Then even the best case can be a loss: if the shares are called away below your cost, the premium may not make up the difference. The calculator will show this as a negative max gain.
Educational only. This page explains order mechanics with example numbers. It is not investment advice, not a recommendation to buy or sell anything, and not a broker. Check your own broker’s rules, fees and assignment terms before you trade.