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Covered Call Calculator
Net basis, break-even, and max profit if your short call is assigned.
How the calculation works
Premium received lowers your effective stock basis. If assigned at the call strike, max profit is (strike − cost basis + premium) × shares minus fees. Break-even is cost basis minus premium. Max loss assumes the stock goes to zero after the credit.
Formula & example
BE = cost − premium; Max profit ≈ (strike − cost + premium) × shares − fees
100 shares @ $48, short $50 call for $1.20 → net basis $46.80, max profit if called ≈ $320 before fees.
Why use this calculator
Covered calls trade upside for premium. Seeing max profit if called and the lowered break-even keeps that tradeoff explicit.
When to use it
Use when you already own (or will own) the shares and are selling a call against them for income or a target exit.
Tips for accurate results
- Assignment risk exists anytime the call is ITM.
- Match shares to contracts (typically 100 shares per contract).
FAQ
What if the stock rallies above the strike?
You keep the premium but upside is capped near the strike if assigned. That capped outcome is what max profit represents.
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