The Best Wheel Strategy & Covered Call Calculator 2026

A covered call is an options strategy where you own 100 shares of a stock and sell (write) a call option against those shares. You receive premium income immediately when you sell the call. If the stock price stays below your strike price at expiration, you keep both the shares and the premium. If it rises above, your shares may be called away at the strike price. It's one of the most popular strategies for generating income from stocks you already own.

A cash secured put is an options strategy where you sell a put option while holding enough cash in your account to buy the stock if assigned. You collect premium upfront immediately. If the stock stays above your strike price, you keep the premium as profit. If it drops below, you're obligated to buy the shares at the strike price—but at an effective discount thanks to the premium received. It's a popular way to get paid while waiting to buy stocks at lower prices.

To sell covered calls: 1) Own at least 100 shares of a stock, 2) Choose a strike price above the current price (how far depends on your goals), 3) Select an expiration date (weekly, monthly, or longer), 4) Sell-to-open a call option contract. OptionsPilot's covered call calculator helps you find the optimal strike price based on whether you want maximum income or to keep your shares with high probability.

The best stocks for covered calls have: high options liquidity (tight bid-ask spreads), moderate volatility (higher premiums without extreme risk), and stocks you'd be comfortable holding long-term. Popular choices include NVDA, AAPL, TSLA, AMZN, META, MSFT, AMD, and SPY. OptionsPilot's covered call screener helps you find optimal opportunities across any stock.

A covered call calculator is a tool that helps you analyze potential covered call trades before executing them. It calculates: premium income you'll receive, annualized return on investment, break-even price, probability of keeping your shares, and maximum profit. OptionsPilot offers a free covered call calculator that also provides AI-powered strike price recommendations.

The covered call income strategy involves repeatedly selling calls against stocks you own to generate consistent premium income. Many investors sell monthly covered calls, collecting 1-3% in premium each month. The key is choosing strike prices that balance income (closer strikes = more premium) with the probability of keeping your shares (further strikes = more likely to keep shares). This strategy works best in flat or slowly rising markets.

A poor man's covered call (PMCC) is a strategy that mimics a traditional covered call but uses a long-dated call option (LEAPS) instead of owning 100 shares. You buy a deep in-the-money LEAPS call, then sell shorter-term calls against it. This requires less capital than owning shares outright, but has more complexity and risk. It's popular for expensive stocks where buying 100 shares would require significant capital.

Covered calls and cash secured puts are complementary strategies often called 'the wheel strategy.' Start by selling cash secured puts on a stock you want to own. If assigned, you now own shares at a discount. Then sell covered calls against those shares for additional income. If called away, you sell at a profit and start over with cash secured puts. This cycle generates income in both directions.

A cash secured put calculator helps you analyze put selling opportunities. It shows: premium income, annualized return, break-even price (strike minus premium), probability of assignment, and capital required. OptionsPilot's free cash secured put calculator also recommends optimal strike prices based on your risk tolerance and income goals.

Covered calls are considered one of the safest options strategies because you already own the underlying shares. Your maximum loss is limited to the stock declining to zero (same as just owning stock), but you've reduced that risk by collecting premium. The only 'risk' is opportunity cost—if the stock rises dramatically above your strike, you miss out on gains above that level. But you still profit from the premium plus any gains up to the strike price.

A covered call ETF is an exchange-traded fund that automatically implements a covered call strategy on an index or basket of stocks. Popular examples include QYLD (Nasdaq-100 covered calls), XYLD (S&P 500 covered calls), and JEPI. These ETFs generate high dividend yields from options premium. However, they cap upside potential and may underperform in strong bull markets compared to simply holding the underlying index.

Yes! OptionsPilot offers iOS widgets for home screen and lock screen that let you monitor your covered call and cash secured put positions at a glance. See current stock prices, days until expiration, whether you're in-the-money or out-of-the-money, and profit/loss status without opening the app. It's the best options widget for iPhone users who want to stay on top of their positions.