Covered Call Break-Even Calculator
Break-even and max profit for a covered call.
Enter your values
ⓘ Live results
Results
- Break-even price
- $48.50
- Max profit if called away
- $650.00
- Downside cushion from premium
- 3%
- Max return on capital
- 13%
Quick answer
A covered call's break-even is your stock cost basis minus the premium received; maximum profit is capped at the strike price plus the premium.
Breakeven = stock cost - premium received; Max profit = strike - cost + premium
How to use the Covered Call Break-Even Calculator
- 1Enter your stock cost basis, the strike you're selling, and the premium received.
- 2Enter how many shares (each contract covers 100 shares).
- 3See your break-even price and the maximum profit if the stock is called away at expiration.
Worked example
Using the values the calculator loads with:
Inputs
- Stock cost basis50 $/share
- Call strike price55 $
- Premium received1.50 $/share
- Number of shares100
Results
- Break-even price$48.50
- Max profit if called away$650.00
- Downside cushion from premium3%
- Max return on capital13%
Frequently asked questions
What if the stock stays below the strike?
You keep the shares and the premium, and can sell another call in the next cycle.
What's the main risk?
Your upside is capped at the strike, so you give up gains above it in exchange for the premium income.
About this calculator
- Built and reviewed by James Whitfield · How we build and test calculators
- Report an error
Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.