Covered Call Income Calculator
Calculate premium income from selling covered calls on stocks you own. See annualized yield, downside protection, and return if assigned.
Covered Call Details
Selling 1 contract against 100 shares.
PREMIUM INCOME
36.5% annualized · $1.50/share
SCENARIOS AT EXPIRY
Stock stays below $55.00 (not assigned)
Keep $150 premium. Sell again next month.
Stock rises above $55.00 (assigned)
Shares called at $55.00. Total return: 13.0% in 30 days.
Stock falls below $48.50 (loss)
Stock loss partially offset by $1.50/share premium.
Frequently Asked Questions
What is a covered call?
You sell a call option against shares you own. The buyer pays you a premium for the right to buy your stock at the strike price. You keep the premium no matter what happens.
What annualized yield can covered calls generate?
On stable large-caps (AAPL, JNJ): 1-2%/month (12-24% annualized). On volatile stocks: 3-5%/month but with much higher assignment risk.
When should I avoid selling covered calls?
Before earnings announcements (IV is high but so is gap risk). On highly appreciated positions where assignment would trigger large capital gains. When you expect a strong rally above your strike price.
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For educational purposes only. Not financial advice. Consult a qualified advisor before making investment decisions.