Covered Call Calculator

COVERED CALL CALCULATOR

DAVID’S TRADE EXECUTION AND MANAGEMENT

1. Ideal Entry Conditions

Buy shares when:

  • Price above 150 MA
  • Pullback toward rising 50 MA
  • Near lower Bollinger Band (30,2)
  • RSI 30–45 zone
  • IV Rank > 40 preferred

This allows you to:

  • Enter at controlled price
  • Immediately sell call with decent premium
  • Reduce risk of instant drawdown

2. Avoid Buying Shares When

  • Parabolic breakout
  • RSI > 70
  • Earnings within 7 days
  • Vertical momentum spike

You don’t want to cap upside immediately after breakout.

3. Standard Covered Call Setup (Smooth Income)

  • DTE: 30–45
  • Delta: 0.18–0.22
  • Strike: 10–15% above cost basis
  • Target premium:
    • Core stocks: 0.8–1.2%
    • Moderate IV: 1.3–2.0%

Lower delta = smoother equity curve.

4. Alternative Aggressive Covered Call Setup (Optional)

If you want slightly more income:

  • Delta: 0.25
  • Strike: 8–10% above cost
  • Premium: 1.5–2.5%

But assignment probability rises.

Disclaimer

This calculator is provided for informational and educational purposes only. It is not intended as investment advice, financial advice, or a recommendation to buy or sell any security or options contract. All calculations are based solely on the data entered by the user and may not reflect actual market conditions, transaction costs, taxes, slippage, liquidity constraints, early assignment risk, or other real-world factors. Options trading involves substantial risk and is not suitable for all investors. Covered call strategies may limit upside potential and do not eliminate downside risk in the underlying security. Past performance, projected returns, and annualized figures are hypothetical and do not guarantee future results. Users are solely responsible for verifying all inputs and evaluating the suitability of any strategy in light of their own financial situation, risk tolerance, and investment objectives. By using this calculator, you acknowledge that you are responsible for your own trading decisions and assume all associated risks.