Covered Call Calculator
Model your premium income before you enter the trade.
A covered call calculator helps you understand the effective yield, breakeven, and outcomes of a covered call before you commit. Wall St Yardie combines this with fair value so you know whether the strike makes sense for the business, not just the premium.
Model a Covered Call in the AppHow a Covered Call Works
You sell a call option against shares you already own. The buyer pays you a premium for the right to purchase your shares at the strike price before expiration.
If the stock stays below the strike
- ✓ Option expires worthless
- ✓ You keep the full premium
- ✓ You still own all your shares
- ✓ You can sell another call next cycle
If the stock rises above the strike
- → Option is exercised (assigned)
- → You sell 100 shares at the strike price
- → You keep the premium you collected
- → You miss gains above the strike price
Key Metrics to Calculate
A covered call calculator should give you these numbers before you enter any trade.
Premium Income
The total premium collected when you sell the call. Equals the option premium × 100 shares per contract. This is your guaranteed income if the option expires worthless.
Premium Yield
The percentage return earned on your stock position from the premium alone. Annualised premium yield helps you compare covered calls across different stocks and strike prices.
× 100
Breakeven Price
The stock price at which you neither gain nor lose on the overall position at expiration. Equals your cost basis minus the premium received.
Maximum Return if Assigned
Total profit if the stock rises above the strike and your shares are called away. Equals the gain from the stock (strike minus cost basis) plus the premium collected.
+ Premium
Example: Covered Call on XYZ
Example for illustrative purposes only. Fair value of the underlying is not reflected here; always model against your valuation first.
Model the Trade Before You Place It
Wall St Yardie helps you understand the fair value of the underlying before you choose a strike, so your covered calls are anchored in fundamentals.
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