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fix(api): scale covered-call premium to the 100-share contract (#32) #39

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fix(api): scale covered-call premium to the 100-share contract (#32) #39

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8 changes: 6 additions & 2 deletions src/api/enhanced_strategy_recommender.py
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Original file line number Diff line number Diff line change
Expand Up @@ -471,8 +471,12 @@ def _create_covered_call(self, symbol: str, current_price: float,
return None

premium = self._get_option_price(call_option, 'bid')
max_profit = premium + (strike - current_price) * 100 # Assume 100 shares
max_loss = (current_price * 100) - premium # Stock could go to zero
# premium is per share; scale it to the 100-share contract so every term
# is in total dollars. Max profit if called away = premium + capital gain
# to the strike; max loss if the stock goes to zero = cost basis less the
# premium collected.
max_profit = (premium + strike - current_price) * 100
max_loss = (current_price - premium) * 100 # Stock could go to zero

# Probability call expires worthless (we keep premium)
prob_profit = 1 - self._calculate_probability_above(current_price, strike, volatility,
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