Max Loss Per Share Calculator
Selling a covered call caps your upside but barely dents your downside: if the stock goes to zero, you lose almost the entire share price minus the small premium you collected. Enter the stock purchase price, the call premium received, the strike price and the number of contracts, and this calculator returns the max loss per share and per contract, the breakeven price, and the max profit if the shares are called away at the strike.
Covered call at expiration
Covers a standard covered call (long shares plus a short call) at expiration. Excludes commissions, dividends, taxes and early assignment. Educational only, not financial advice.
Quick Answer
Buy stock at $100, sell the $105 call for $2, one contract: the max loss is $98 per share ($9,800 per contract) if the stock falls to zero, the breakeven is $98, and the max profit is $7 per share ($700 per contract), reached only if the stock closes at or above $105 at expiration. The calculator above is pre-filled with this exact trade.
Key takeaways
- The premium is a cushion, not a hedge. A $2 premium on a $100 stock absorbs a 2% fall and nothing more; below the $98 breakeven the position loses dollar for dollar with the shares.
- Max loss and breakeven are the same subtraction (stock minus premium) answering two different questions: how bad can it get, and where does the position stop losing money.
- The max profit is capped at the strike. Every dollar the stock rises above $105 belongs to the call buyer, not to you.
- Size the trade for the $98, not the $7. A covered call is income on stock you would hold anyway, not a low-risk trade in its own right.
- Quick Answer
- How to use the max loss per share calculator
- The three formulas behind the result
- Worked example, checked against this exact tool
- Reading the three numbers together
- Assignment, dividends and what this tool leaves out
- What competing calculators miss
- Frequently asked questions
- Add This Calculator to Your Website
- References
How to use the max loss per share calculator
Enter your actual trade terms, per share, and click Calculate. The result stays hidden until you click.
- Stock purchase price: your cost basis per share. If you bought the shares months ago at a different price, that older price is still the anchor, because the result measures the whole position from what you paid.
- Call premium received: the per-share credit from selling the call. Brokers quote premiums per share and settle them per contract, so a $2.00 quote is $200 of cash per contract.
- Strike price: the strike of the call you sold. Strikes below your purchase price are accepted, and the tool flags them, because assignment at such a strike locks in a loss before the premium is counted.
- Contracts: one contract covers 100 shares, the standard contract size described in the Options Clearing Corporation’s Characteristics and Risks of Standardized Options. Leave the field blank and the tool assumes a single contract; enter 0 and it refuses, because a fraction of a contract cannot be traded.
- Read the totals, not just the per-share lines: the per-contract figures are what actually leave or enter your account.
Two honest quirks of the tool are worth knowing before you rely on it. The contracts field accepts fractional entries such as 2.5 and multiplies them through, even though real contracts trade in whole numbers, so treat any fractional result as a scaling exercise rather than a tradeable position. And if the premium you enter is larger than the stock price, the max loss prints as a negative dollar figure with a note that no downside loss is possible; that is an input combination that cannot occur with a real listed call, and the note is the tool telling you so.
The three formulas behind the result
Every covered call at expiration is settled by three short formulas, and the result box shows the substitution for your own numbers so you can audit it.
Breakeven at expiration = Stock purchase price − Premium received
Max profit per share = (Strike − Stock purchase price) + Premium received
Contract totals = Per-share figure × 100 × Contracts
These are the same definitions the Options Industry Council uses in its covered call (buy/write) strategy guide: maximum loss is the stock purchase price minus the premium received, labelled “substantial” in that guide, and maximum gain is the strike minus the purchase price plus the premium. The logic is plain once the position is written out. You own the shares, so a falling stock costs you its full decline; the premium already sits in your account, so it offsets the first dollars of that decline; and the short call obliges you to sell at the strike, so gains stop accumulating there. Nothing else in the position can move the expiration outcome: volatility, time decay and the Greeks decide what the position is worth if you close early, not what it pays at expiration.
Worked example, checked against this exact tool
Each row below is a verified run of the calculator above, not a hand calculation, including the two note cases the tool prints.
| Run | Max loss / share | Max loss total | Breakeven | Max profit / share | Max profit total |
|---|---|---|---|---|---|
| Worked example: $100 stock, $2 premium, $105 strike, 1 contract | $98.00 | $9,800.00 | $98.00 | $7.00 | $700.00 |
| Three contracts: $50 stock, $1.50 premium, $55 strike | $48.50 | $14,550.00 | $48.50 | $6.50 | $1,950.00 |
| Strike below cost: $100 stock, $2 premium, $90 strike | $98.00 | $9,800.00 | $98.00 | $-8.00 | $-800.00 |
| No premium: $200 stock, $0 premium, $210 strike | $200.00 | $20,000.00 | $200.00 | $10.00 | $1,000.00 |
The third row is the one new covered call writers miss. With the strike at $90 against a $100 cost basis, the “max profit” is negative: even in the best case, assignment at the strike, the position loses $8 per share after the premium. The tool says so in a note under the result rather than printing a fake profit, and it is right to. Selling an in-the-money call that deep is sometimes done deliberately to exit a position, but nobody should enter it believing the capped outcome is a gain.
On the worked example, the shape of the trade in one picture, per share:
Reading the three numbers together
Max loss tells you the disaster case, breakeven tells you where patience runs out, and max profit tells you the ceiling you accepted. Read separately, each one is easy to rationalise; read together, they describe the bargain honestly.
A $98 / $98 / $7 profile means risking $98 to make $7. That profile is defensible exactly when the premium is a bonus on shares you intend to keep through a flat or gently rising market, and hard to defend as a speculation entered for its own sake. The premium also reframes small declines: a stock that drifts from $100 to $99 has lost money on the share line, yet the covered call position is still $1 per share ahead because of the $2 premium. That cushion is the whole of the strategy’s downside story. If genuine downside protection is what you need, a protective put is the tool built for it, at the cost of paying premium instead of collecting it. Positions with genuinely capped losses look different in structure: the iron condor max loss calculator shows a spread whose worst case is fixed by the wing width rather than by the full price of a share.
Assignment, dividends and what this tool leaves out
The figures here are expiration figures for a standard covered call, before commissions, assignment fees, dividends and taxes. Three real-world items sit outside the arithmetic and change real outcomes.
Early assignment. Listed equity calls are American-style, so the buyer can exercise before expiration, and short calls are most often assigned early around a dividend, when the call trades near parity. The Options Clearing Corporation’s disclosure document explains assignment mechanics in full; the practical point here is that your shares can leave before expiration day, which ends the position at roughly the same strike-capped economics rather than something worse.
Dividends. While you hold the shares you receive any dividends paid, which quietly improve the position beyond the three headline numbers. If assignment takes the shares before the ex-dividend date, that dividend goes with them. Brokers treat the tax side of assignment and of the premium under the option rules summarised in IRS Publication 550, and the premium can affect the holding period of the shares themselves in some cases.
Closing early. Nothing forces you to hold to expiration. Buying the call back frees the shares and converts the remaining outcome into whatever the buy-back cost; before expiration the call’s price also moves with implied volatility and time, the sensitivities measured by the option Greeks calculator. If the shares are called away, the forced sale is a taxable disposal, and the stock sell calculator can size the gain on the sale leg itself.
What competing calculators miss
Most tools ranking for this keyword are full covered call or options profit calculators, and their extra machinery often buries the one number the searcher came for:
- Ryan O’Connell Finance’s covered call calculator: the strongest rival, with Black-Scholes premium and implied volatility modes and a payoff chart. Its max loss is present but sits inside a chart-first layout, and a user who already knows the premium has to work around the IV machinery to reach it.
- MarketXLS and Macroption: spreadsheet-grade strategy planners that compare eight structures at once or map profit at many price points. Powerful for portfolio work, slow for a single question, and both frame max loss per contract or per position rather than leading with the per-share figure.
- TradingBlock’s options breakeven calculator: covers every strategy from straddles to condors, so the covered call is one profile among many, and its example defaults to a straddle-style layout rather than a share owner’s trade.
- Generic options profit calculators (SpotGamma and similar): built around Greeks, volatility and theoretical prices before expiration. They answer a different question: what the position is worth today, not what it can lose at expiration.
- The gap this page fills: the disaster case stated first, per share and per contract, from four inputs, with the formula substitution printed under the result, the in-the-money strike case flagged instead of hidden, and no chart, account or spreadsheet between the question and the answer.
Frequently asked questions
It is the stock purchase price minus the premium received, the loss per share if the stock falls to zero by expiration. On a $100 stock with a $2 premium collected, the max loss is $98 per share and $9,800 for the single contract covering 100 shares.
Both equal the stock price minus the premium. The breakeven is the expiration stock price where the position stops losing money, and the max loss is what you lose per share if the stock goes all the way to zero, so the same subtraction produces both.
(Strike minus stock purchase price) plus premium, per share, reached when the stock is at or above the strike at expiration. Profits do not grow past that point, because the shares are called away at the strike.
Not at expiration on the position itself, because a stock price cannot fall below zero. Commissions, assignment fees and any cost of buying the call back early sit outside this arithmetic, and closing early at a loss is a separate decision with its own price.
Your shares are called away at the strike and you keep the strike-capped gain plus the premium. Everything above the strike belongs to the call buyer. That forgone upside is the price of the premium income, and it is the most common reason covered call writers feel regret.
Yes. If the call expires worthless you keep the full premium and you keep the shares. The premium also lowers your breakeven by its full amount, although it does not protect you from a large fall in the stock itself.
One standard equity option contract covers 100 shares. That is why the tool multiplies every per-share figure by 100 and by the number of contracts to get the totals.
At the same strike the two positions have similar economics: both collect premium and both carry downside exposure to the stock. The covered call starts from owning the shares, while the cash-secured put sets aside cash to buy the shares if the put is assigned.
No. It is arithmetic on the four numbers you enter, at expiration, before commissions, dividends and taxes. Whether a covered call suits your position is a decision for you or a licensed adviser who knows your situation.
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References
- The Options Industry Council. Covered Call (Buy/Write) Strategy. Accessed October 22, 2026.
- The Options Clearing Corporation. Characteristics and Risks of Standardized Options (Options Disclosure Document). Accessed October 22, 2026.
- Internal Revenue Service, U.S. Department of the Treasury. Publication 550, Investment Income and Expenses (options and straddle rules). Accessed October 22, 2026.
- Internal Revenue Service, U.S. Department of the Treasury. Topic 409, Capital Gains and Losses. Accessed October 22, 2026.
- Financial Industry Regulatory Authority (FINRA). Options: Product Overview and Risks. Accessed October 22, 2026.
- U.S. Securities and Exchange Commission, Investor.gov. An Introduction to Options: Investor Bulletin. Accessed October 22, 2026.
- U.S. Securities and Exchange Commission. Options: SEC Investor Publication. Accessed October 22, 2026.
- Cboe Global Markets. Cboe S&P 500 BuyWrite Index (BXM) Dashboard. Accessed October 22, 2026.
- Cboe Global Markets. Product Description and Margin and Net Capital Requirements: Options on the Cboe S&P 500 BuyWrite Index (Regulatory Circular RG08-108). Accessed October 22, 2026.
- The Options Industry Council. LEAPS Strategies, Including Selling LEAPS Covered Calls. Accessed October 22, 2026.