Covered Call Return Calculator

About this calculator

A covered call write sells a call option against stock you already own, and its real return depends on which of two outcomes happens: the stock stays below the strike and the option expires worthless (the "static return"), or the stock rises above the strike and your shares get called away (the "if-called return"). Static return is roughly premium ÷ (stock price − premium), and if-called return adds the capital gain up to the strike: (premium + (strike − stock price)) ÷ (stock price − premium); both are then annualized by multiplying by 365 ÷ days to expiration to compare trades of different lengths.

Options income traders and covered-call fund managers compute both numbers before placing a trade because the premium alone can be misleading — a high premium on a short-dated, deep in-the-money call can look attractive but produce a lower annualized return than a smaller premium on a longer-dated, out-of-the-money call.

This calculator takes your stock price, strike price, premium received and days to expiration and returns the static return, the if-called return, and both annualized, so you can see the full range of outcomes before you sell the call.