Barchart's Covered Call Screener helps you find the best equity option calls using numerous filters to scan for those with a high theoretical return.
A covered call is a neutral to slightly bullish option strategy where you expect the underlying security to increase in value.
The covered call option strategy is used to generate income, where you cover the option position by owning the underlying security. A covered call involves selling a call option at a strike price above the underlying price to collect a premium. The opportunity loss of a covered call would be if the security price increased significantly above the strike price, as your gains are capped. Profit is limited to the premium received for the short call plus the difference between the strike value and security price. Risk is the depreciation in the price of the underlying security. Maximum profit is achieved if the security price increases to the strike price at expiration.
The page is initially sorted by descending "Potential Return."
Options information is delayed a minimum of 15 minutes, and is updated at least once every 15-minutes through-out the day.
Note:Â 0DTE Friday option expirations are removed from the website at 7:45pm ET each Friday.
The screener displays probability calculations based on the delayed stock price at the time the strategy is updated. The new day's options data will start populating the screener at approximately 8:55a CT. Strikes that have not traded today are excluded from the results.
Main features of the Screener include:
- Ability to add various filters, with hundreds of different combinations.
- Save a Screener: When you've defined filters that you want to use again, save the screener.
- Load a Saved Screener: Select a previously saved set of Screener filters to view today's results.
- View the Results using Flipcharts: Page through charts of the symbols on the results page. You may choose to view charts for the underlying equity or for the option strike when you open the Flipcharts link.
- Download the Results: Download up to 1000 results to a .csv file. The Download will also pull all of the data fields present on the View you use.
- Save Results to a Watchlist: You can save either the underlier symbols or the options symbols presented in the Results tab to any of your Watchlists.
- Automatic Screener Emails: This option is available for Barchart Premier Members. When you save a screener, you can opt to receive the top 10, 25, or 50 results via email along with an optional .csv file of the top 1000 results. Emails can be sent at Market Open (9:00am CT), Mid-Day (12:00pm CT), Market-Close (3:00pm CT), and Overnight (3:00am CT) Monday through Friday.
Note: When selecting the Filter View for your Screener email, the filter must identify a specific search value in order for it to be included in the email.
About Covered Calls
Selling covered calls is an investment strategy that can be used to generate additional income from the stock positions you already own. Over 75% of options are held until expiration and expire worthless.
Using a covered call strategy, you can sell options on the stocks you own (providing downside protection on the stock), and earn the premium income if the option expires worthless.
You earn a premium (income) from writing the call, and still have all the benefits of owning the stock (dividends), provided the call is not exercised before it expires.
- You own (are long) at least 100 shares of a stock.
- You sell (short) a call option against that stock (1 option controls 100 shares).
Thus, 1 Covered Call = long 100 shares of a stock + short 1 call option. The aggregate operation is typically known as covered call writing.
It is called “covered” because should the option be exercised you own the stock required to fulfill the delivery obligation for the 100 shares, as opposed to selling a naked call, where you don’t own the underlying stock, which represents an unlimited liability for the seller.
When writing covered calls you are protected against unlimited losses in the event that the strike price dips below the market price of the underlying asset. A similar strategy to writing a covered call is to sell a naked put.
Filters
Barchart Premier subscribers can add or modify different filters on the screener to find calls on the most favorable stock options.
Reordering Filters
Once filters are added, you may drag and drop them in the SET FILTERS tab to reorder the way they appear on the RESULTS tab (when using the Filters View). Each filter you add has the "Order" icon which is used to reposition it.
Deleting Filters
To remove a filter from your screener, click the checkbox to the left of the filter name, then click the red "Delete" button at the top of the column. You may also select all filters for deletion by clicking the checkbox at the top of the column, which selects ALL filters for deletion. You will be asked to confirm your decision to delete.
Since a Covered Call is written on stocks you own, a typical filter to add to this screener is the Symbol filter.
So you can focus on the best options, the screener starts by removing certain puts and calls from all strategies:
- Only Monthly options are shown, with Days to Expiration between 15-60 days.
- Only stocks are screened (with the ability to add ETFs and Indices to the mix).
- For the US market, the options volume must be greater than or equal to 100, For Canada, volume must be greater than or equal to 1.
- For the US market, open interest must be greater than or equal to 500. For Canada, open interest must be greater than or equal to 5.
- The option must not be an "adjusted" option (Ex: The option cannot be based on a split stock).
- Moneyness is up to -1.00%
- Delta is between -0.20 to -0.40 (Low). Delta is the theoretical amount the option price may change based on $1 move in stock.
- The bid price must be greater than 0.05
In addition:
- The stock price must be greater or equal to 1.00.
- The option must not be a "restricted" option. Non-standard or "restricted" options (options quotes marked with an asterisk * after the strike price, and found on an individual symbol's options page) are automatically removed from the screener. A "restricted option" is typically created after spin-offs or mergers, and is not tradeable.
- Strikes that have not traded today are excluded from the results.
Probability Calculation
We take the underlying stock price (l), the target price (b), days to expiration (t) and the implied volatility (v) to calculate probability:
Probability Above = 1-NORMSDIST (LN(b / l) / (v*SQRT (t / 365)))
Probability Below = NORMSDIST (LN (b / l) / (v*SQRT(t / 365)))
b = target price
l = underlying last price
v = implied volatility
t = days to expiration
Covered Call Break Even: Probability of the underlying trading above the break even target at expiration.
Covered Call Max Profit: Probability of the underlying expiring at or above the strike price at expiration.
Views
The Results page contains three standard views. You may switch the view using the links at the top of the screener results table. The Main View shows the Volume and Open Interest for each option, while the Dividend & Earnings View can be used to highlight strategies with upcoming dividends and earnings. The Filter view shows you the data contained in the field(s) you've added to the screener.
Main View
- Symbol - the underlying equity. Clicking on the symbol will take you to the current quote page.
- Price~ - the delayed stock price at the time the strategy is updated for the underlying equity.
- Exp Date - the expiration date of the option
- Strike - the price at which the underlying security can be bought if the option is exercised.
- Moneyness -  the relative position of the underlying asset's last price to the strike price. When a call option's Moneyness is negative, the underlying last price is less than the strike price; when positive, the underlying last price is greater than the strike price. When a put option's Moneyness is negative, the underlying last price is greater than the strike price; when positive, the underlying last price is less than the strike price.
- Bid - the premium to purchase this call option.
- Break Even (Bid) - Break even Bid (Uncovered) = Strike Price + Bid Price
- Net Debit - the cost to enter this covered call, or the Break Even point for the call on expiration date. Net Debit (Break Even) is calculated as (Stock Price - Bid). If the stock price is HIGHER than the call's Net Debit on expiration, the call will make a profit.
- Return if Flat - The return of the position if the price of the underlying stock remained unchanged at the expiration of the options contract. For Covered Calls, this is calculated based on this information:
- if Stock Last Price > Strike Price then ((Options Strike + Bid + Dividends - Stock Price) / (Stock Price - Bid))
- if Stock Last Price <= Strike Price then (Bid / (Stock Price + Dividends - Bid)) * 100.0
- Volume - the total number of options traded in the current day for a contract.
- Open Interest - the total number of open option contracts in the market for a particular contract. The more popular the contract is with options traders, the greater the Open Interest. An opening transaction will increase the Open Interest, and a closing transaction will decrease it.
- Implied Volatility (IV)- the estimated volatility of the option strike over the period of the option.
- Delta - Delta measures the amount an option price will change as a result of a $1.00 price change of the underlying security. Since call options rise and fall directly with the price of the stock, they are assigned deltas between 0 to -1.
- OTM Probability - the probability the that underlying price is below the option's strike price at expiration.
- Potential Return - the potential return for this strategy, assuming the options are assigned or called. For a covered call, Potential Return is calculated using Time Premium, your profit (income) per share between now and option expiration.
- Time Premium = (Options Strike + Call Bid + Dividend - Stock Last Price)
- Calculate Net Debit: (Stock Last Price - Call Bid)
- Potential Return = Time Premium / Net Debit
- Annualized Potential Return - the annualized percentage of potential return for this covered call assuming the options are assigned or called. It is calculated as (Potential Return / Days Held) * 365 where Days Held is the number of days remaining until expiration.
Dividend & Earnings View
- Next Dividend - the next dividend amount anticipated on the next ex-dividend date.
- Next Dividend Ex-Date - the next ex-dividend date. When no future ex-dividend date has been released, this field will show "N/A".
- Next Earnings Date - The future earnings date. If no future date has been released, this field will show "N/A".
Options View
- Symbol - the underlying equity. Clicking on the symbol will take you to the current quote page.
- Price~Â - the delayed stock price for the underlying equity.
- Exp Date - the expiration date of the option
- Strike - the price at which the underlying security can be bought if the option is exercised.
- Bid - The highest price that a BUYER is willing to pay, or the price at which you can sell the option.
- Ask - The lowest price that a SELLER is willing to receive, or the price at which you can buy the option.
- Volume - the total number of options traded in the current day for a contract.
- Open Interest - the total number of open option contracts in the market for a particular contract. The more popular the contract is with options traders, the greater the Open Interest. An opening transaction will increase the Open Interest, and a closing transaction will decrease it.
- Implied Volatility (IV)- the estimated volatility of the option strike over the period of the option.
- Delta - Measures the sensitivity of an option's theoretical value to a change in the price of the underlying asset.
- Gamma - Measures the rate of change in the delta for each one-point increase in the underlying asset.
- Theta - A measure of the time decay of an option, the dollar amount that an option will lose each day due to the passage of time.
- Vega - Measures the sensitivity of the price of an option to changes in volatility.
- ITM Probability - For a call option, the probability that the underlying price is above the option's strike price at expiration. For a put option, the probability that the underlying price is below the option's strike price at expiration.
- Last Trade - the date/time of the last trade for the option. Options information is delayed a minimum of 15 minutes, and is updated at least once every 15-minutes through-out the day.
