Options wheel calculator
See the premium yield and annualized return on a cash-secured put or covered call, so you can tell which trades actually pay for the capital they use.
How the wheel return is calculated
Selling a cash-secured put ties up cash as collateral, the strike price times 100 per contract. The premium you collect against that capital is your return for the cycle: premium divided by strike. Because cycles vary in length, the number that actually matters is the annualized version, which scales the cycle return up to a full year so a 7-day put and a 45-day put can be compared honestly.
Covered calls work the same way. The only difference is that the capital at risk is the value of the shares you already hold, so you use your share basis in place of the strike. The premium yield and the annualizing step do not change.
What annualized return does and does not tell you
Annualized yield is the right way to compare trades, but it is not a promise. It assumes you can keep finding similar trades all year, which real markets do not always offer. Treat it as a way to rank opportunities against each other, not as a guaranteed rate of return.
Track the whole wheel, not one trade
This calculator scores a single put or call. The wheel is a sequence: sell a put, maybe get assigned, sell covered calls, then start over. To know what the strategy is really earning you need every leg linked into a cycle with premium folded into a rolling cost basis. That is what the options wheel tracker in Telemetry does. Our post on the options wheel strategy, explained walks through the full cycle.
Common questions
How do you calculate return on a cash-secured put?▾
Divide the premium you collect by the strike price. That is your return on the capital the put ties up for one cycle. Multiply by 365 divided by the days to expiration to annualize it, so you can compare trades of different lengths on the same footing.
What is the break-even on a cash-secured put?▾
The strike price minus the premium you collected. If you get assigned, that is your effective cost per share, and you are still ahead of the market anywhere above it.
Does this work for covered calls too?▾
Yes, the annualized-yield math is the same. For a covered call, the capital at risk is the value of the shares you hold rather than cash collateral, so use your share basis in place of the strike. The premium yield and annualizing step are identical.
Why annualize the return?▾
A 2% return means very different things over 7 days versus 45 days. Annualizing puts every trade on a per-year basis so you can compare a short weekly put against a longer monthly one and see which actually pays better for the capital it uses.
Go deeper on each leg
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