Calculate your covered call return
Estimate premium income, premium return, effective sale price, and the two possible outcomes: expires worthless or called away.
Position & Trade Details
Contracts
Strike 190 — $2.50 premium
Expires worthless
You keep the premium. Shares stay yours.
Net premium
$249.35
Premium return
1.39%
Annualized return
15.80%
Upside to strike
2.48%
Interest on collateral
$71.01
Total income
$320.36
* Mathematical projection only. Not a guarantee.
Called away
Shares sold at the strike. Premium adds to your gain.
Effective sale price
$192.50
Stock gain/loss
$1,000.00
Total profit
$1,249.35
Total return
6.94%
Not annualized — return is not locked in until shares are sold.
Strike 195 — $1.80 premium
Expires worthless
You keep the premium. Shares stay yours.
Net premium
$179.35
Premium return
1.00%
Annualized return
11.37%
Upside to strike
5.18%
Interest on collateral
$71.01
Total income
$250.36
* Mathematical projection only. Not a guarantee.
Called away
Shares sold at the strike. Premium adds to your gain.
Effective sale price
$196.80
Stock gain/loss
$1,500.00
Total profit
$1,679.35
Total return
9.33%
Not annualized — return is not locked in until shares are sold.
Strike A vs Strike B
Compare premium, upside to strike, and annualized return.
Strike A ($$190)
Premium
$2.50
($249.35)
Upside
2.5%
Annualized
15.8%
Strike B ($$195)
Premium
$1.80
($179.35)
Upside
5.2%
Annualized
11.4%
Position Summary
Cost basis, breakeven, and max loss for this position.
Cost basis
$18,000.00
Breakeven
$177.50
Max loss
$17,750.65
Max loss assumes the stock goes to zero — that is the absolute worst case, not a typical outcome. Your realistic downside is the stock falling below your breakeven of $177.50, and the premium you collected cushions that drop.
For educational purposes only. Not financial advice. Options involve risk.