Covered Call Payoff Calculator
A covered call is one of the most common income strategies: you own 100 shares per contract and sell a call option against them, collecting the premium. This calculator shows the total payoff at expiration for any stock price, along with the maximum profit, breakeven and the profit if the stock is called away at the strike. Enter your purchase price, the strike, the premium received per share and the number of shares to see the full picture before you place the trade.
Covered call payoff formula
Stock P/L = (price at expiration - purchase price) * shares
Call payoff to you = -max(0, price - strike) * shares
Premium income = premium * shares
Total P/L = Stock P/L + Call payoff + Premium income
Max profit = (strike - purchase price + premium) * shares
Breakeven = purchase price - premium
The short call you wrote costs you the option's intrinsic value at expiration, max(0, price minus strike) per share, which is why your upside is capped. Below the strike the call expires worthless and you keep the full premium.
Worked example
Buy 100 shares at $100, sell a call at the $110 strike for $3 premium. If the stock closes at $108: stock gain is (108 - 100) * 100 = $800, the call expires worthless (108 is below 110), and premium income is $3 * 100 = $300. Total P/L = $1,100.00. Maximum profit, reached at or above $110, is (110 - 100 + 3) * 100 = $1,300.00. Breakeven is 100 - 3 = $97.00.
Covered call: frequently asked questions
What is a covered call?
A covered call combines a long position of 100 shares per contract with a short (written) call option on the same stock. You collect the call premium up front. In exchange you cap your upside at the strike price, because if the stock rises above the strike the call buyer can exercise and buy your shares at that strike.
What is the maximum profit on a covered call?
Maximum profit is reached at or above the strike. It equals (strike minus purchase price plus premium received) per share, times the number of shares. Above the strike, your shares are called away at the strike, so further stock gains do not benefit you.
What is the breakeven price of a covered call?
Breakeven equals the stock purchase price minus the premium received per share. The premium lowers your effective cost basis, so the stock can fall by the premium amount before the overall position turns to a loss at expiration.
Does this calculator include dividends or commissions?
No. It computes the option-theory payoff at expiration from the stock price, strike, premium and share count. Dividends received, commissions and taxes are not modeled. Treat the result as the contractual payoff before those real-world adjustments.
Sources and method
- U.S. Securities and Exchange Commission, investor education on options: Investor.gov: Options.
- Options Clearing Corporation, the issuer and guarantor of US listed options: theocc.com.
- Payoff is the standard expiration-value identity for a long-stock-plus-short-call position; no proprietary data is used.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.