EMT Investing Covered Call Return

Transaction Costs

Transaction costs are shared between tools so you only have to enter your transaction costs one time.

  1. Select the TRANSACTION COSTS tab.
  2. Enter the commission costs and fees you pay. The change indicator ([change icon] Changes) appears when changes have been made and not saved.
  3. Click the SAVE button to save your cost information.

Calculator

  1. Select the CALCULATOR tab.
  2. In the spaces provided enter the following information:
    • The stock (ticker symbol)
    • The number of shares. The number of option contracts is calculated based on the number of shares so this should be an even multiple of 100
    • The price per share for the stock
    • The annual dividend
    • The number of payments per year the dividend is spread across (usually 4)
    • The number of dividend payments that will occur during the term of the call option.
    • The strike price of the call option
    • The per share premium of the call option
    • The number of days remaining until the call option expires
  3. If you check USE PROTECTIVE PUT then enter the following in the spaces provided:
    • The put option strike price
    • The per share premium of the put option
  4. Results update automatically. Calculated information includes:
    • Total acquisition price (cost basis)
    • Dividend income (amount, term rate, and annualized rate)
    • Call option proceeds (amount, term rate, and annualized rate)
    • Put option cost (if a protective put is used)
    • Profit or loss on assignment (amount, term rate, and annualized rate)
    • Outcome if option is not assigned (income, term return, and annualized return)
    • Outcome if assigned with dividend (income, term return, and annualized return)
    • Outcome if assigned without dividend (income, term return, and annualized return)
    • Breakeven price per share
    • Monetary delta to breakeven
    • Percent delta to breakeven
    • Maximum capital loss (amount, percent of total cost)
    • Hedged capital (amount, percent of total cost)
    • Maximum transaction loss (amount, percent of total cost)
  5. To store the scenario currently in the calculator click the ADD TO SCENARIOS button.
  6. If you are editing a scenario the button will say UPDATE SCENARIO instead of ADD TO SCENARIOS. Pressing the button causes the scenario to be updated in the scenario table.
  7. Use the NEW button when editing if you want to save changes as a new scenario instead of updating the existing one. The NEW button causes the UPDATE SCENARIO button to revert to ADD TO SCENARIOS. After clicking NEW click ADD TO SCENARIOS to actually add the scenario to the table.
  8. The change indicator ([change icon] Changes) appears when changes have been made and not saved. Click the SAVE button to save your changes.

Scenario Table

  1. Select the SCENARIOS tab.
  2. The scenario table is displayed showing key information for the scenarios you have added to the table.
  3. To delete an entry in the scenario table click the delete icon ([delete icon]) on that table row.
  4. To display or edit an entry in the scenario table click the edit icon ([edit icon]) on that table row.
  5. To clear the entire scenario table click the CLEAR TABLE button
  6. The change indicator ([change icon] Changes) appears when changes have been made and not saved. Click the SAVE button to save your changes.

Also Good to Know

  1. Clicking SAVE on any tab saves transaction costs, the calculator information, and the scenario table.
  2. Some calculations require assumptions so check the footnotes on the calculator page to understand the assumptions made.
  3. Use of this tool constitutes agreement with the Terms and Conditions of Use
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