How is annualized yield calculated for a covered call?

Annualized yield = (Premium ÷ Cost basis) × (365 ÷ days to expiration). The if-called annualized return also bakes in any upside to the strike plus dividends collected before expiration.

What strike should I sell a covered call at?

Most income sellers target a 0.20 to 0.35 delta strike — this gives a ~65–80% probability the call expires worthless, balancing premium income with the risk of having shares called away.

What is early-assignment risk on a covered call?

Before an ex-dividend date, if the upcoming dividend exceeds the call's remaining time value, a rational holder of the long call will exercise early to capture the dividend. Our calculator flags this scenario explicitly.

How much can you make selling covered calls?

Typical annualized yields for 30-day, 0.30-delta covered calls on liquid US equities range from 10% to 35%, depending on the underlying's implied volatility. High-IV names yield more but carry larger downside risk.

Is the data real-time?

Yes. The covered call calculator loads the live option chain from Polygon when you enter a ticker. After-market hours it uses the day's closing prices.

Covered call calculator — annualized yield, downside cushion, ex-div warnings

Enter your shares, strike, and premium — get annualized yield, downside cushion, if-called return, and assignment risk. Live chains via Polygon or Tradier (optional).

Trade Inputs

Ticker

Type a US-listed symbol

Current price

Cost basis / share

What you paid per share

Contracts

1 contract = 100 shares

Expiration

Load chain to populate

Strike

Pick an expiration first

Premium collected / share

Auto-fills from chain; override to model your own price

Implied volatility

Annualized decimal (0.28 = 28%)

Expected dividend / share

Ex-dividend date (if any)

Results

Premium income

—

per contract × contracts

Static yield

—

— annualized

If-called yield

—

— annualized

Downside cushion

—

Premium / Spot

Breakeven

—

Cost basis − Premium

Days to expiry

—

Covered call calculator — annualized yield, downside cushion, ex-div warnings

Trade Inputs

Results

Payoff Diagram

How a covered call works