Covered Call Calculator

• Enter the price you paid for the shares, how many you own, and the call you sold or plan to sell: its strike, premium and days to expiration. Each call contract covers 100 shares.
• Set the valuation date, then add the next ex-dividend date and dividend per share, or start from a stock to fill the dated price and declared dividend from GNG data.
• Read your premium income, break-even, return if called and if unchanged, and the early assignment check. Switch to Cash-secured put to price the put side of the trade.

A covered call means you own at least 100 shares of a stock and sell one call option against them. The buyer pays you a premium now. In return, you agree to sell your shares at the strike price if the buyer exercises, which usually happens at expiration when the stock is above the strike.

Selling covered calls turns a stock you already hold into an income position. If the stock stays below the strike, the call expires worthless and you keep both the premium and the shares, ready to write another call. If the stock rises above the strike, your shares are called away at the strike, so you keep the premium and the gain up to the strike but give up any rise beyond it.

The premium also cushions a fall in the stock, though only by the amount you collected. A covered call does not protect you from a large drop, and you still own the shares on the way down. That trade-off, income now for a capped upside, is what this covered call calculator puts in numbers.

Use this covered call option calculator to compare keeping the shares with having them called away.

Premium income = premium per share × number of shares.

Break-even price = price paid per share minus premium per share minus any dividend you collect per share. Below this price at expiration, the position loses money.

Maximum profit, if the shares are called at expiration = (strike minus price paid + premium + dividends collected) × number of shares.

Net cost = (price paid minus premium) × number of shares. This is the cash you have tied up after the premium comes in.

Return if called = maximum profit ÷ net cost. Profit with the stock unchanged = (the lower of the current stock price and strike minus price paid + premium + dividends) × number of shares. Divide that profit by net cost for its return. Returns are unavailable if net cost is zero or negative.

Annualized return = return × 365 ÷ days to expiration. Annualizing lets you compare a shorter call with a longer one, but it assumes you could repeat the same trade all year, which the market may not allow.

Income cushion = (premium + dividend) ÷ current stock price. This compares the income collected with the current share price. Your break-even instead uses the price you paid for the shares.

Use this covered call premium calculator to see how the premium changes your income and break-even price.

On Oct 9, 2026, Pfizer (PFE) closed at $28.28 and had a declared $0.43 dividend with an ex-dividend date of Nov 6, 2026. In this example, you owned 100 shares and sold 1 call with a $29 strike expiring Dec 18, 2026, 70 days later, for $0.78 a share, a Black-Scholes value at 24% volatility, not a quote.

You would have collected $78 in premium and $43 in dividends if you still owned the shares at the start of Nov 6, 2026. Your break-even would have been $27.07. If PFE finished above $29, the called shares would have produced $193.00, a 7.0% return on $2,750 of net cost (36.6% annualized). At an unchanged stock price, you would have kept the shares and earned $121, a 4.4% return (22.9% annualized).

Early assignment check: above about $31.21 on Nov 5, 2026, the model would have favored early exercise by the call buyer. You could have kept the premium but missed the $0.43 dividend. The estimate uses 24% volatility and a 4% interest rate.

A call buyer can exercise early to collect the dividend. That can make sense the day before the ex-dividend date when the call is in the money and exercising is worth more than holding the call after the dividend. If that happens you keep the premium, sell the shares at the strike and miss the dividend. The calculator estimates the stock price where that incentive begins.

Early assignment is not a loss in itself. You still sell at the strike and keep the premium, and your return arrives sooner. What you lose is the dividend you were counting on, and with it part of the return you planned. Dividend-inclusive results assume ownership at the start of the ex-dividend date, and assignment is never certain.

If you want the dividend, you have a few choices before the ex-dividend date: sell a call that expires before it, pick a higher strike that is less likely to be in the money, or buy back the call and sell a later one, known as rolling. Dividend dates move from quarter to quarter, so check the next declared date for each stock you write calls on.

Use the free ex-dividend calendar to see which stocks go ex-dividend in the coming weeks.

A cash-secured put is the other half of the same idea. You sell a put and set aside enough cash to buy 100 shares at the strike if you are assigned. The buyer pays you a premium now.

If the stock stays above the strike, the put expires worthless and you keep the premium. If it falls below, you buy the shares at the strike, and the premium lowers your real cost.

For the cash-secured put example, PFE was $28.28 on Oct 9, 2026. Selling 1 put expiring Dec 18, 2026 with a $27 strike for $0.69 a share, a Black-Scholes value at 24% volatility, not a quote, would have required $2,700 in cash and paid $69. The break-even and effective cost would have been $26.31 a share. If the put expired worthless, the return would have been 2.6%, or 13.3% annualized. Assignment would have bought 100 shares for an effective cost 7.0% below the starting stock price.

This mode assumes the full cash is set aside, unlike a naked put sold on margin. Its payoff if the stock falls to zero is the premium minus the strike, per share, for each contract. No dividend is counted before you own the shares.

At expiration the calculator uses exact payoffs for 100-share contracts. Covered-call returns divide profit by net cost, the share cost minus the premium.

Cash-secured put returns divide the premium by the full cash set aside. Annualized returns scale the result by 365 days over the days to expiration.

For the early-assignment check, S is the stock price just before the ex-dividend date, K is the strike and D is the declared dividend per share. The model solves S - K = call(S - D, K, remaining days), using the volatility and interest rate you enter and no continuous dividend yield after that dividend. S must exceed K and the post-dividend stock price must be nonnegative. Remaining days run from the ex-dividend date to expiration.

Above the strike plus the dividend, that equation is the same as comparing the post-dividend call time value with the dividend. The equation also handles prices near the strike. If no finite boundary exists, the calculator says so. Only an ex-dividend date after valuation and at or before expiration is eligible.

Dividend used for pricing the example premiums: the $0.43 dividend on Nov 6, 2026, equivalent to a 7.96% continuous annual yield over this option's 70-day life. The payment is discounted at a 4% interest rate. Only the declared dividend inside the option's life is included. Mode switches use the same calculation with your current inputs, and use no dividend yield when no declared dividend falls inside the date window. The early-assignment check separately models the declared dividend at its ex-date.

When you start from a stock, the closing price and the next declared ex-dividend date and amount come from GNG market and dividend data, the same records behind the dividend pages. Taxes, commissions and the chance of assignment on other dates are not included.

Read the free Options Series Part 2 for a broader explanation of option payoffs and hedging.

See Connor Graham for the author profile.

Read our methodology for more on how GNG works with financial data.

Read the definition of volatility to understand the model input.

Read the definition of dividend yield for the continuous-yield convention used to price the example premiums.

Use the sibling calculators to model a wider strategy or inspect an option price before you compare contracts.

For calls, puts, spreads, straddles and iron condors at any stock price and date, use the options profit calculator.

For an option's model price and all five Greeks, use the Black-Scholes calculator.

To find calls and puts by Greeks, IV rank and liquidity across US stocks and ETFs, use the Options Screener with GNG Pro.

Chart the stock and its dividend history in Advanced Charting, free with a GNG account.

Find a stock and its free option chain through Stocks.