Shares you hold and a call you sell against them: the premium, the return if the stock is called away and if it does not move, the breakeven and the most it can make.
| Price at expiry | Profit or loss at expiry |
|---|---|
| $44.40 | -$440.00 |
| $48.80 | $0.00 |
| $50.00 | $120.00 |
| $55.00 | $620.00 |
| $59.40 | $620.00 |
A covered call is 100 shares per contract and one short call against them. The premium arrives on the day the call is sold and is yours whatever happens next.
At expiry there are two outcomes. Below the strike the call expires and you keep the shares and the premium. Above it the shares are sold at the strike, so the gain is capped at the distance to the strike plus the premium. Below the breakeven the shares have lost more than the premium paid.
Annualised figures are simple, not compounded: the return scaled by 365 over the days to expiry. They describe the arithmetic of one cycle and assume nothing about the next one.
The strike minus what you paid for the shares, plus the premium, divided by what you paid for the shares. It is the most a covered call can return, because above the strike the shares are sold at the strike.
The stock price minus the premium received. At expiry, below that price the shares have lost more than the call paid.
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Every price here is one you typed; nothing is fetched and nothing is stored. The numbers travel in the address of this page, so a result can be linked to. Results are at expiry for one structure, before commissions and fees, and assume no early assignment. An illustration of the arithmetic, not advice.