Covered Call Max Profit Calculator
What a covered call makes if the shares get called away.
Your numbers
What you actually paid, net of premiums already collected.
The strike you are selling.
The quoted option price, e.g. 1.20.
Defaults to one.
Add this to see the annualized return.
Results
- Max profit
- $620.00
- Return on cost
- 13.78%
- Annualized return
- 167.63%
- Breakeven price
- $43.80
How it works
A covered call caps your upside at the strike, so the best case is fully knowable the moment you sell it: the shares get called away at the strike and you keep the premium. Max profit is the gain from cost basis to strike, plus the premium, times 100 per contract. The catch worth watching is a strike below your cost basis — selling a call there guarantees a loss on the shares if you are assigned, and the premium rarely covers the gap. That situation shows up constantly when a stock has fallen after a put assignment, and it is where wheel traders most often talk themselves into a bad trade.
max profit = (strike − cost basis + premium) × 100 × contracts · breakeven = cost basis − premium
Worked example
You hold shares at a $45 cost basis and sell a 50-strike call for 1.20. If assigned you make (50 − 45 + 1.20) × 100 = $620, a 13.8% return on cost. Over 30 days that annualizes to about 167%.
Common questions
What if the strike is below my cost basis?
Then max profit is negative — assignment locks in a loss. Either sell a strike above your basis and accept the lower premium, or wait. The calculator shows the loss rather than hiding it.
What happens if the stock goes far above the strike?
You still only make max profit. That capped upside is what you sold. If you would regret it, the strike was too low.
Should I use my original purchase price as cost basis?
Use the price you paid less every premium collected on that stock so far. That running net basis is what determines whether the wheel is actually profitable.
Other wheel calculators
- Premium Yield CalculatorTurn a premium into a yield you can compare across strikes and expirations.
- CSP Cash CalculatorHow much cash gets locked up when you sell a put.
- Assignment Probability CalculatorRead delta as a rough odds of being assigned.
- IV Rank CalculatorFind out where today's implied volatility sits in its yearly range.
- Theta Decay CalculatorSee what time decay is worth to you per day.
- Wheel Capital CalculatorHow much capital it takes to run the wheel on a given stock.
- Options Liquidity CheckerCheck whether a contract is actually tradable before you sell it.
- Wheel Position Size CalculatorHow many contracts fit inside your risk budget.
- Wheel Expectancy CalculatorWhat one wheel cycle is worth on average, given your own numbers.
Stop doing this by hand
Wheel Income screens live option chains for cash-secured puts and covered calls, then tracks every cycle from assignment through called away.
Try the screenerFor information and educational purposes only. Not investment advice. Options carry risk, including loss of the entire position.