Your trade
Enter the contract you're looking at. Everything updates as you type.
What you receive, not the whole contract
What you paid per share
If the stock lands here at expiration
| Stock at expiration | What happens | Your result |
|---|
How each number is worked out
How the wheel works
- Sell a cash-secured put on a stock you'd be happy to own, setting aside the cash to buy 100 shares per contract.
- If it expires worthless, you keep the premium and can sell another.
- If you're assigned, you buy the shares at the strike. The premium you kept lowers your effective cost.
- Sell a covered call against those shares, ideally above your cost basis.
- If the shares are called away, you're back to cash with the premium from both sides, and the cycle starts again.
Why annualised yield flatters you
A 3.6% return over 29 days annualises to about 46%, but only if you repeat it all year at the same rate and nothing goes against you. The per-trade number is what you actually collect this cycle; treat the annualised figure as a comparison tool between trades, not a forecast.
What this calculator doesn't include
Commissions and assignment fees, dividends, early assignment, margin interest, and tax. It also assumes one expiration and no adjustment. Real results differ, and options can lose more than the premium you collected when a stock moves hard against you.