How are AMZD covered call max profit and max loss calculated?

Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the AMZD covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 343.10%), the computed maximum profit is $73.00 per contract and the computed maximum loss is -$926.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AMZD covered call?

The breakeven for the AMZD covered call priced on this page is roughly $9.27 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current AMZD market-implied 1-standard-deviation expected move is approximately 98.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AMZD implied volatility affect this covered call?

AMZD ATM IV is at 343.10% with IV rank near 68.65%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.

AMZD Covered Call Strategy

AMZD (Direxion Daily AMZN Bear 1X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on NASDAQ.

The Direxion Daily AMZN Bear 1X ETF, along with its counterpart, the Direxion Daily AMZN Bull 2X ETF, are constructed to deliver specific daily investment outcomes tied to the common shares of Amazon.com, Inc. (NASDAQ: AMZN). Before the deduction of any fees or expenses, the Bear 1X ETF (AMZD) aims to produce daily returns that precisely match 100% of the inverse (or opposite) performance of Amazon's stock. Conversely, the Bull 2X ETF endeavors to achieve daily returns equivalent to 200% of Amazon's daily performance.

AMZD (Direxion Daily AMZN Bear 1X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $4.2M, a beta of -1.31 versus the broader market, a 52-week range of 8.195-11.77, average daily share volume of 13.2M, a public-listing history dating back to 2022. These structural characteristics shape how AMZD etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -1.31 indicates AMZD has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. AMZD pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on AMZD?

A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income.

Current AMZD snapshot

As of June 30, 2026, spot at $9.46, ATM IV 343.10%, IV rank 68.65%, expected move 98.36%. The covered call on AMZD below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 17-day expiry.

Why this covered call structure on AMZD specifically: AMZD IV at 343.10% is mid-range versus its 1-year history, so the credit collected on a AMZD covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 98.36% (roughly $9.31 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AMZD expiries trade a higher absolute premium for lower per-day decay. Position sizing on AMZD should anchor to the underlying notional of $9.46 per share and to the trader's directional view on AMZD etf.

AMZD covered call setup

The AMZD covered call below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With AMZD near $9.46, the first option leg uses a $10.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AMZD chain at a 17-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 AMZD shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$9.46	long
Sell 1	Call	$10.00	$0.19

AMZD covered call risk and reward

Net Premium / Debit: -$927.00
Max Profit (per contract): $73.00
Max Loss (per contract): -$926.00
Breakeven(s): $9.27
Risk / Reward Ratio: 0.079

Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium.

AMZD covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on AMZD. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-99.9%	-$926.00
$2.10	-77.8%	-$716.94
$4.19	-55.7%	-$507.89
$6.28	-33.6%	-$298.83
$8.37	-11.5%	-$89.78
$10.46	+10.6%	+$73.00
$12.55	+32.7%	+$73.00
$14.64	+54.8%	+$73.00
$16.73	+76.9%	+$73.00
$18.82	+99.0%	+$73.00

When traders use covered call on AMZD

Covered calls on AMZD are an income strategy run on existing AMZD etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.

AMZD thesis for this covered call

The market-implied 1-standard-deviation range for AMZD extends from approximately $0.15 on the downside to $18.77 on the upside. A AMZD covered call collects premium on an existing long AMZD position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether AMZD will breach that level within the expiration window. Current AMZD IV rank near 68.65% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on AMZD should anchor more to the directional view and the expected-move geometry. As a Financial Services name, AMZD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AMZD-specific events.

AMZD covered call positions are structurally neutral to slightly bullish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. AMZD positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AMZD alongside the broader basket even when AMZD-specific fundamentals are unchanged. Short-premium structures like a covered call on AMZD carry tail risk when realized volatility exceeds the implied move; review historical AMZD earnings reactions and macro stress periods before sizing. Always rebuild the position from current AMZD chain quotes before placing a trade.

Frequently asked questions

What is a covered call on AMZD?: A covered call on AMZD is the covered call strategy applied to AMZD (etf). The strategy is structurally neutral to slightly bullish: A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income. With AMZD etf trading near $9.46, the strikes shown on this page are snapped to the nearest listed AMZD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AMZD covered call max profit and max loss calculated?: Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the AMZD covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 343.10%), the computed maximum profit is $73.00 per contract and the computed maximum loss is -$926.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AMZD covered call?: The breakeven for the AMZD covered call priced on this page is roughly $9.27 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current AMZD market-implied 1-standard-deviation expected move is approximately 98.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a covered call on AMZD?: Covered calls on AMZD are an income strategy run on existing AMZD etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
How does current AMZD implied volatility affect this covered call?: AMZD ATM IV is at 343.10% with IV rank near 68.65%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.