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    CALCULATORiQ™

    Covered Call Calculator

    Position Details

    Return Profile

    Premium Income (1 contract)

    $135.00

    32.9% annualized if not called

    Static Return (30 days):2.70%
    If-Called Return:12.70%
    Max Profit if Assigned:$635.00
    Net Cost Basis:$48.65
    Downside Protection:2.70%

    Assignment trade-off

    Above $55.00 your shares are likely called away and upside is capped at $635.00. The premium cushions only the first 2.70% of a decline.

    How covered call returns are calculated

    Static return assumes the stock stays flat and the call expires worthless: premium divided by the capital invested in the shares. If-called return adds the capital gain up to the strike. Annualizing multiplies the static return by 365 divided by days to expiration, which is a comparison tool, not a promise of repeatable premium.

    Related tools: Options profit calculator, Put option calculator, Iron condor calculator.

    Frequently asked questions

    How is covered call return calculated?

    Static return is the premium divided by the capital invested in the shares, assuming the stock is flat at expiration. If-called return adds the capital gain up to the strike price when the shares are assigned.

    What is annualized covered call yield?

    The static return multiplied by 365 divided by the days to expiration. It makes different expirations comparable, but it assumes you can repeat the same premium all year, which markets rarely allow.

    How much downside protection does a covered call give?

    Only the premium received. Expressed as a percentage of the purchase price, that is the size of the decline the premium absorbs before the position loses money.

    What happens if the stock rises above the strike?

    The shares are likely called away at the strike price. Your upside is capped at the if-called return, no matter how far the stock runs above it.

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