Work out covered call return instantly with clear inputs, formula shown and shareable results.
A covered call sells upside above the strike in exchange for premium today. The static return is what you keep if the stock is unchanged; the if-called return adds the capital gain up to the strike and is the realistic best case.
Covered call returns
Static = premium / (price - premium); if called = (strike - price + premium) / (price - premium)
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
Giving up a large rally. Your upside is capped at the strike while all the downside below it remains yours.
Higher strikes keep more upside but earn less premium. The choice encodes your view on the stock.