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Pro Tips · Aug 12, 2026

Covered Calls Trade Upside for Premium: The Ceiling in One Table

A covered call does not remove stock risk, and its premium is not free upside. A ••• worked example maps gross payoff, breakeven and capped gain across four expiration prices.

PRO#wheel-education#covered-calls#options-basics#risk-management
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Photo: William Warby — Wikimedia Commons/Flickr (CC BY 2.0; cropped)

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A covered call combines 100 shares with one short call on those shares. FINRA explains that a standard-size equity option contract represents 100 shares and that a call seller accepts the obligation to sell the stock at the strike price if assigned. The premium is…

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