Buy-Write (Covered Call) Yield Calculator
Enter a buy-write in one step — buy the stock and sell a call together — and see the static yield, the if-called return, and both annualized.
How it works
Net cost = stock − premium · Static return = (premium + dividend) ÷ stock · If-called return = (premium + dividend + strike − stock) ÷ stock · Annualized = × 365 ÷ days
A buy-write is a covered call placed as a single order: you buy the stock and simultaneously sell a call against it. The static return is what you earn if the stock is unchanged at expiration — just the premium (plus any dividend) as a yield on the purchase price. The if-called return is the maximum, earned if the stock finishes above the strike and your shares are assigned, capturing the premium plus the capital gain up to the strike. The premium also buys a small cushion: your break-even drops to the net cost basis, giving downside protection equal to the premium yield.
Worked example
Buy at $100 and write the $105 call for $2.50. If the stock is flat you keep $2.50, a 2.5% static return; if it is called away you also gain $5 to the strike, so 2.50 + 5 = $7.50, a 7.5% if-called return. Over 45 days that annualizes to roughly 60.8%, and the $2.50 premium gives 2.5% of downside protection.
Frequently asked questions
What is the difference between static and if-called return?
Static return assumes the stock is unchanged at expiration, so you earn only the premium and any dividend. If-called return assumes the stock is above the strike and assigned, adding the capital gain up to the strike — it is the maximum the position can make.
What is downside protection here?
The premium lowers your effective cost basis, so the stock can fall by the premium amount before you lose money. Expressed as a percentage of the purchase price, that is the downside protection the covered call provides.
Why cap my upside with a covered call?
Writing the call caps gains above the strike in exchange for the premium income now. It suits a neutral-to-mildly-bullish view where you value steady income and a small cushion over unlimited upside.
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Educational estimate, not investment advice. Options and margin involve substantial risk.