Covered Call Calculator
Enter your shares, strike, and premium — get annualized yield, downside cushion, if-called return, and assignment risk. Live chains via Polygon or Tradier (optional).
Trade Inputs
Results
Payoff Diagram
How a covered call works
The math behind the numbers
The covered call is the most popular options-income strategy because the math is simple and the risk is bounded by something you already own. The Options Industry Council calls it the "buy-write" for a reason: you own (or buy) 100 shares and write (sell) one call against them.
Static yield = (premium + dividends) ÷ cost basis. It's the return if the stock sits exactly at today's price through expiration. If-called yield adds upside-to-strike on top: (strike − cost basis + premium + dividends) ÷ cost basis. Annualizing multiplies by 365 ÷ DTE so a 30-day 1% trade reads as ~12% annualized — a fairer comparison across expirations.
Downside cushion = premium ÷ spot. It's how far the stock can drop before your P&L turns red.
Early-assignment risk before ex-dividend
Our calculator flags one thing most others miss. FINRA notes that assignment risk is highest the day before ex-dividend. Why? A rational long-call holder exercises when the dividend exceeds the call's remaining extrinsic (time) value, because exercising lets them capture the dividend instead of letting it evaporate from the call price. We use spot, strike, IV, time to expiry, dividend size, and days-to-ex-div to score this risk on a 0–100 scale.