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Covered call — payoff & breakeven calculator

Hold the underlying (or a future) and sell an out-of-the-money call to earn premium. Upside is capped at the call strike.

✓ Free✓ Black-Scholes pricing✓ GreeksOutlook: Neutral to bullish

Net premium—

Max profit—

Max loss—

Breakeven(s)—

Reward / risk—

Chance of profit*—

Payoff diagram

Green: at expiry · Blue: today (Black-Scholes)

Delta—

Gamma—

Theta / day—

Vega (1%)—

P&L at expiry

*Chance of profit is a log-normal estimate from implied volatility — not a prediction.

Options strategies

Long callBullish · Buy a call option. Profit grows as the price rises above the strike plus premium; the most you can lose is the premium paid.Open payoff →Long putBearish · Buy a put option. Profit grows as the price falls below the strike minus premium; risk is limited to the premium.Open payoff →Covered callNeutral to bullish · Hold the underlying (or a future) and sell an out-of-the-money call to earn premium. Upside is capped at the call strike.Open payoff →Protective putBullish with insurance · Hold the underlying and buy a put. The put limits the loss if the price crashes, like insurance.Open payoff →Bull call spreadModerately bullish · Buy a call and sell a higher-strike call. Cheaper than a long call, with limited profit and limited risk.Open payoff →Bear put spreadModerately bearish · Buy a put and sell a lower-strike put. Limited risk and limited profit if the price falls.Open payoff →Bull put spreadNeutral to bullish (credit) · Sell a put and buy a lower-strike put. You collect a net credit and keep it if the price stays above the short strike.Open payoff →Bear call spreadNeutral to bearish (credit) · Sell a call and buy a higher-strike call. Net credit, kept if the price stays below the short strike.Open payoff →Long straddleBig move either way · Buy a call and a put at the same strike. Profits from a large move in either direction; loses if the price stays still.Open payoff →Short straddleRange-bound · Sell a call and a put at the same strike. Earns both premiums if the price stays near the strike — unlimited risk on big moves.Open payoff →Long strangleBig move either way · Buy an out-of-the-money call and put. Cheaper than a straddle but needs a bigger move.Open payoff →Short strangleRange-bound · Sell an out-of-the-money call and put. Wider profit zone than a short straddle, still unlimited risk.Open payoff →Iron condorRange-bound, limited risk · Sell an OTM put spread and an OTM call spread. Collects premium in a range with capped losses on both sides.Open payoff →Iron butterflyPinned near the strike · Sell an ATM straddle and buy OTM wings. Higher credit than an iron condor with a narrower profit zone.Open payoff →Long call butterflyPinned near the strike (debit) · Buy one lower call, sell two ATM calls, buy one higher call. Low cost, peak profit at the middle strike.Open payoff →Call ratio spreadMildly bullish · Buy one call and sell two higher calls. Often a credit or small debit; risk becomes unlimited above the upper strike.Open payoff →

How the Covered call works

Hold the underlying (or a future) and sell an out-of-the-money call to earn premium. Upside is capped at the call strike.

Market view: Neutral to bullish.

Legs

Buy 1 × future / underlying
Sell 1 × higher-strike call

Change the spot price, strikes and premiums above to model your own trade. The table shows profit or loss at several expiry prices, and the Greeks show how the position reacts today.

Options involve substantial risk. Payoffs ignore brokerage, taxes and early assignment. Education only — not investment advice.

FAQ

What does the payoff diagram show?

The solid line is your profit or loss at expiry for every possible price of the underlying. The blue line estimates today’s value using the Black-Scholes model with your implied volatility and days to expiry.

How are premiums estimated?

Click “Price with Black-Scholes” to fill premiums from spot, strike, days to expiry, implied volatility and interest rate. For real trades, type the actual premiums from your broker’s option chain.

What are breakeven points?

Prices of the underlying at expiry where the strategy neither makes nor loses money. They are found where the payoff line crosses zero.

Does it work for Nifty, Bank Nifty, stocks and US options?

Yes. Enter the spot price, strikes, premiums and your contract’s lot size — the maths is the same for index options, stock options, US equity options or crypto options.

What do the Greeks mean?

Delta: change in value for a 1-point move. Gamma: change in delta. Theta: value lost per day from time decay. Vega: change for a 1% rise in implied volatility. Totals are for the whole position.