Stock option return calculations provide investors with an easy metric for comparing stock option positions. For example, for two stock option positions which appear identical, the potential stock option return may be useful for determining which position has the highest relative potential return. Covered call return A covered call position is a neutral-to-bullish investment strategy and consists of purchasing a stock and selling a call option against the stock. Two useful return calculations for covered calls are the %If Unchanged Return and the %If Assigned Return. The %If Unchanged Return calculation determines the potential return assuming a covered call position's stock price at option expiration is the same as at initial purchase. The %If Assigned Return calculation assumes the price of the stock is equal to or greater than the strike price of the sold call option. For in-the-money (see moneyness) covered calls, the calculations for %If Unchanged Return and the %If Assigned Return will be equal. Example calculations for %If Unchanged potential return and %If Assigned Return for covered calls are shown below: Covered Call Cash Flow In-The-Money Covered Call %If Unchanged Potential Return Calculation %If Unchanged Potential Return = Option premium / (Stock price - Option price) %If Unchanged Potential Return = 2/(51-3) = 4.17% %If Assigned Potential Return = (Option premium + Profit/loss on stock)/(Stock price - Option price) %If Assigned Potential Return = (2 + 0)/(51-3) = 4.17% Covered Call Cash Flow Out-Of-The-Money %If Assigned Potential Return = (2 + 1)/(49-2) = 6.38% Bull put credit spread return The Bull Put Credit Spread (see bull spread) is a bullish strategy and consists of selling a put option and purchasing a put option for the same stock or index at differing strike prices for the same expiration. The purchased put option is entered at a strike price lower than the strike price of the sold put option. The return calculation for the Bull-Put Credit Spread position assuming price of the stock or index at expiration is greater than the sold put is shown below: Bull Put Credit Spread Potential Return = (sold put price - purchased put price)/(sold put strike price - purchased put strike price - initial credit) For example, suppose a put option with a strike price of $100 for ABC stock is sold at $1.00 and a put option for ABC with a strike price of $90 is purchased for $0.50, and at the