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Covered Call Calculator

Calculate a covered call's static return and if-called return, both annualized, from your stock cost basis, the strike price, and the premium received.

Net cost basis (breakeven price)
$48.00
Static return
4%
Static return (annualized)
48.67%
Profit per share if called away
$7.00
If-called return
14%
If-called return (annualized)
170.33%

How it works

A covered call sells one call option against stock you own, collecting the premium up front in exchange for capping your upside at the strike price. Two outcomes matter: the stock stays below the strike and the option simply expires worthless ('static'), or it finishes above the strike and your shares get called away at the strike price ('if-called'). Static return is the premium as a fraction of your stock's cost basis: premium ÷ stock price. If-called return adds the capital gain (or loss) from selling at the strike instead of your cost basis: (premium + (strike − stock price)) ÷ stock price.

Both figures are also annualized on a 365-day basis — return × (365 ÷ days to expiration) — so a 30-day trade and a 180-day trade can be compared on equal footing, the same way a bond's yield or a savings account's APY gets annualized.

The strike doesn't have to sit above your cost basis — if you enter a strike below it, the if-called scenario simply shows the resulting loss on the stock, partially or fully offset by the premium, exactly as a real assignment at that strike would.

FAQ

Which return figure should I care about more?

That depends on your outlook. If you expect the stock to stay roughly flat or drift down slightly, the static return is what you'll actually collect. If you think there's a real chance the stock rallies past the strike, the if-called return (which is usually higher, since it also captures the capital gain) is the more realistic estimate of your total profit.

Does this include dividends?

No — this only accounts for the option premium and the stock's price move to the strike. If the stock pays a dividend before expiration and you still hold it on the record date, your actual total return would be higher than either figure shown here.

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