Covered Calculator View

The Covered Calculator is a view on the Calls and Puts Option Chains which shows calculations for Covered Call (Buy-Write & Unwind) or Covered Put (Sell-Write & Unwind) trades.

Commissions and dividends are not included in the calculations, so be mindful of their effect and timing.

Inputs
Stock Price	Choose to base the calculations using a stock price from the market: Ask for Covered call calculations and Bid for Covered Put calculations, or input a cost you want to use as the stock price. The input cost is loaded with an average cost from your account when that is available. If the Bid/Ask Prices are chosen, the calculations will stay updated based on changes in the stock price. Calculations will stay updated with quote changes in the option prices.
Shares	Enter the number of shares you would like to run the calculations with. The calculations will assume 1 option is traded for every 100 shares .
Target Price	Used to calculate the return on the covered call or covered put strategy if the target price is reached.

Inputs

Stock Price

Choose to base the calculations using a stock price from the market: Ask for Covered call calculations and Bid for Covered Put calculations, or input a cost you want to use as the stock price.

The input cost is loaded with an average cost from your account when that is available.
If the Bid/Ask Prices are chosen, the calculations will stay updated based on changes in the stock price.
Calculations will stay updated with quote changes in the option prices.

Enter the number of shares you would like to run the calculations with. The calculations will assume 1 option is traded for every 100 shares .

Target Price

Used to calculate the return on the covered call or covered put strategy if the target price is reached.

Outputs
Max Gain	Shows in Dollars the maximum amount you could make from that trade. This would assume that the option expires with an assignment. If assigned on Calls, you would be selling the stock, and if assigned on puts you would be buying the stock back. Call Calculation: ((Call strike price) - (either Stock Ask or input stock price, depending on stock price chosen) + (call bid)) shares input * option multiplier, usually 100)* Put Calculation: ((either Stock Bid or input stock price, depending on stock price chosen) + (put bid) - (Put strike price)) shares input * option multiplier, usually 100)*
% Max Gain	The % return if the max gain is reached, expressed as a % of the initial investment price, calculated as follows: Call Calculation: Max Gain / ((stock Ask or input cost – Call Bid)share quantity)* Put Calculation: Max Gain/ ((stock Bid or input cost + Put Bid)share quantity)*
Static ROI	Static Return on Investment shows in Dollars the return if the stock price did not move from the current price and the option was to expire. Calculations: If stock would be assigned, uses the Max Gain calculations above If stock would not be assigned, Call Calculation: Call Bid share quantity* Put Calculation: Put Bid share quantity*
% Static ROI	The Static ROI represented as a %. Call Calculation: Static ROI / ((stock Ask or input cost – Call Bid)share quantity) Put Calculation:* Static ROI/ ((Stock Bid or input cost + Put Bid)share quantity)*
Target ROI	Target Return on Investment shows in Dollars the return if the target price is reached at expiration. The Target price can be any price the stock could reach, and could be used to see what the profit or loss would be at that target price. Calculations: If stock would be assigned, uses the Max Gain calculations above If stock is unchanged, uses the Static ROI calculation above If stock price changes, Call Calculation: Call Bid +/– difference in stock Ask or input cost to target price Put Calculation: Put Bid +/– difference in stock Bid or input cost to target price
% Target ROI	The Target Return on Investment expressed as a % Call Calculation: Target ROI / ((stock Ask or input cost – Call Bid) share quantity)* Put Calculation: Target ROI/ ((Stock Bid or input cost + Put Bid) share quantity)*
Break Even	The price the stock could reach at expiration where the profit or loss is 0 for the strategy based on the inputs. Assumes a profitable transaction, so when a profit is not possible, shows “—“. Call Calculation: Ask price of stock or input cost – Call Bid Price Put Calculation: Bid price of stock or input cost + Put Bid Price
% Protection	Due to the nature of Covered Call and Covered Put strategies, there is a degree of hedging that takes place by selling the option against the stock position. Call Calculation: Call Bid/stock Ask or input cost 100* Put Calculation: Put Bid/Stock bid or input cost 100*

Commissions, taxes, and transaction costs are not included in any of these strategy discussions, but can affect final outcome and should be considered. Please contact a tax advisor to discuss the tax implications of these strategies. Many of the strategies described herein require the use of a margin account. With long options, investors may lose 100% of funds invested. In-the-money long puts need to be closed out prior to expiration, since exercising them could create short stock positions.

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Multiple leg options strategies will involve multiple commissions. Please read the options disclosure document titled "Characteristics and Risks of Standardized Options." Member SIPC