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Covered call calculator: premium, break-even and return

Own the shares and sell a call against them. Enter your cost basis, the strike, the premium and the days to expiry to see the premium collected, break-even, max profit and returns.

How to use it

  1. Enter the shares you own and your cost basis per share.
  2. Enter the call strike, the premium per share and days to expiry.
  3. Read the premium collected, break-even and max profit.
  4. Compare the return if the shares are called away with the return if the stock is unchanged.
Max profit = (strike − cost basis + premium) × shares · Break-even = cost basis − premium
Example. 100 shares at $100, sell the 105 call for $1.80: premium $180, break-even 98.20, max profit $680 (6.8%) if called away.

About this calculator

A covered call trades upside above the strike for premium income now. The premium lowers your break-even slightly, but the shares can still fall, and gains above the strike are given up. Returns here ignore dividends, taxes and commissions, and early assignment can happen on American-style options. The annualized figure assumes the same return could be repeated, which is a simplification.

Frequently asked questions

How do you calculate covered call max profit?
Strike minus your cost basis, plus the premium, times the number of shares. That profit is capped once the stock rises past the strike.
What is the break-even on a covered call?
Your cost basis minus the premium received. Below that price the position loses money at expiry.
What is the main risk of a covered call?
The shares can fall in value, with only the premium as a cushion, and you give up gains above the strike.

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Informational calculator for reference only. Outputs are arithmetic, not quotes, recommendations or trade signals. LiquidityLevels provides educational market commentary, not financial advice.