Options income strategy.

Covered call strategy: own 100 shares, sell call options against them to generate premium income. Premium received reduces cost basis (downside protection) but caps upside if stock rises above strike. Most popular options income strategy. Annualised yields typically 8-25% on dividend-paying stocks vs 2-5% from dividends alone.

Example: own 100 shares at 50 (5,000 stock value). Sell 30-day call at 55 strike for 1.50 premium = 150 income. Annualised yield: 150 / 5,000 × (365/30) = 36.5% annualised. If stock stays below 55: keep premium and shares, repeat. If stock exceeds 55: shares called away at 55 (500 capital gain) + 150 premium = 650 total return on 5,000 = 13% in 30 days.

Covered call best on stocks you'd be happy to sell at strike price. Bad on high-growth stocks (cap upside while taking downside). Best on dividend payers and stable large-caps. Wheel strategy: sell covered calls when called away, sell cash-secured puts to re-enter, repeat. Generates income whether stock goes up, down, or sideways - just not unlimited upside if stock rallies hard.

A worked example

Try the defaults: current stock price of 50, call strike price of 55, premium per share of 1.5, days to expiry of 30. The tool returns 150.00. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Current Stock Price, Call Strike Price, Premium per Share, Days to Expiry, and Shares Owned. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

The formula behind this

Premium income = premium per share × shares. Annualised yield = yield × 365/days. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Using this well

Treat the output as one point on a wider map. Run it three times — a pessimistic case, a central case, and a stretch case — and plan against the pessimistic one. That habit alone separates people who stick with an investment plan from those who bail at the first wobble.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.