Covered Call ScreenerSell calls where the premium is rich, and know what you give up.
A covered call trades upside for income. Whether that is a good trade depends on two things: whether the call is priced above how much the stock actually moves, and whether the premium is high only because something is about to happen. This screener measures both, with the same rules it applies to puts.
The same screen, on the call side
Switch the screener from puts to calls and everything else stays put. It picks one call per name and tenor by delta (+0.30 by default, at about 30 and 90 days, preferring standard monthly expiries). It applies the same liquidity checks to that exact contract, compares implied volatility with realized volatility, and reads the term structure for events.
That is deliberate. By put-call parity, a covered call and a cash-secured put at the same strike and expiry are close to the same position: both lose when the stock falls, and both give up the move above the strike. It would be strange to judge them by different rules, so this screener doesn't.
What a covered call costs you
The capital is the shares: 100 per contract at today's price, less the premium you collect. The screener counts exactly that, the breakeven times 100, and works out how many contracts fit inside the maximum you set — no more than a quarter of it in one name by default — rounding down. The yield it shows is the premium as a return on that capital, scaled to a year. What happens at expiry depends on where the stock ends up:
| Stock at expiry | What happens |
|---|---|
| Below the breakeven | A loss, as if you had bought the shares at the breakeven. The premium is the only cushion. |
| Between breakeven and strike | You keep the premium, and the shares, with whatever the stock did. |
| Above the strike | The shares are called away at the strike. You keep the premium and the gain up to the strike, and miss everything above it. |
The last row is the real price of a covered call. You are paid to give up the right tail, and the screener's job is to tell you whether you are being paid enough for it.
Rich against what, exactly?
The question a call seller should ask is the same one a put seller asks: is this option priced above the movement the stock has actually shown? The screener compares implied volatility at the trade's tenor with realized volatility over the last 30 sessions, measured with the Yang–Zhang estimator, which uses each day's open, high, low and close rather than the close alone. When implied is below realized, the call is cheap relative to how the stock moves, so you would be underpaid to cap your upside. It is marked Avoid.
It then goes one step further than the ratio. It prices the specific call at realized volatility, compares that fair value with the fill you are likely to get, and calls the gap richness. Implied volatility differs strike by strike, so a stock's headline number can say rich while the 0.30-delta call you would actually sell is not.
How calls are ranked
| Weight | Measure | What it asks |
|---|---|---|
| 55% | Variance risk premium | Is this option priced above how much the stock has actually been moving? At-the-money implied volatility at the trade's tenor, against realized volatility over the last 30 sessions. |
| 25% | Annualized yield | The credit as a return on the capital the position ties up, scaled to a year. |
| 20% | Liquidity | Open interest and bid-ask spread at the chosen contract, weighted equally. |
Scores are percentiles against the other names in the same run. An inverted term structure, with the call's expiry priced above a later one, costs a call up to 40 points and is flagged as event risk beyond 20%. That matters more for calls than it seems. A stock that gaps up on news takes the shares away at the strike, and the premium that looked generous was the market's price for that gap. The full formulas are on the methodology page.
What it models, and what it does not
- Dividends. Each stock's dividend yield is part of every price. A call that is in the money before an ex-dividend date can be assigned early, so the card warns when one is expected before expiry. That date is estimated from the payment schedule until the company declares it, so check it yourself before selling a call on a stock that pays one.
- Your cost basis. Calls are priced against today's market, not against what you paid for the shares. If you own them from higher up, the screened strike may sit below your basis.
- Naked calls. Out of scope, by design rather than by omission. The screener covers covered calls and cash-secured puts and will not suggest an uncovered call.
Where the data comes from
By default the screener reads CBOE's delayed option chains and Nasdaq's daily price history, so no brokerage account is needed. Because the chains are delayed, every credit it shows is indicative: a starting point for a live quote, not a fill. Every suggestion says when its quotes were fetched, and anything older than an hour is marked stale. You can connect your own Interactive Brokers account instead, through IBKR's own sign-in screen. That connection is read-only, and nothing in the product can place, change or cancel an order.
Questions
What is a covered call?
Owning 100 shares of a stock and selling one call option against them. You collect the premium now, and in exchange you agree to sell the shares at the strike if the stock is above it at expiry.
Do I need to own the shares to use the screener?
No. It screens the market, pricing each call as if the shares were bought at today's price and sizing the position on that cost. Whether you already hold them, and at what price, is up to you.
What delta should a covered call have?
It is a trade-off, not a rule. A lower delta collects less premium and is less likely to be called away; a higher delta collects more and gives up more of the upside. The screener defaults to 0.30 and lets you change it. That default is a starting point, not a recommendation.
Does the screener account for dividends?
Yes. Each stock's dividend yield is part of every price, and a covered call carries a warning when an ex-dividend date is expected before expiry, since a call in the money then can be assigned early. The date is estimated from the payment schedule until it is declared, so confirm it before relying on it.
Will it ever suggest a naked call?
No. Uncovered calls are out of scope by design. The screener covers covered calls and cash-secured puts only.
Screen today's chains for covered calls.
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