How are BITS 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 BITS covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 40.50%), the computed maximum profit is $435.50 per contract and the computed maximum loss is -$5,363.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a BITS covered call?

The breakeven for the BITS covered call priced on this page is roughly $53.65 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The BITS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.61%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current BITS implied volatility affect this covered call?

BITS ATM IV is at 40.50% with IV rank near 10.65%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.

BITS Covered Call Strategy

BITS (Global X - Blockchain & Bitcoin Strategy ETF), in the Financial Services sector, (Asset Management - Cryptocurrency industry), listed on NASDAQ.

The Global X Blockchain & Bitcoin Strategy ETF, identified by the ticker BITS, aims to deliver significant growth in its investment value over an extended period.

BITS (Global X - Blockchain & Bitcoin Strategy ETF) trades in the Financial Services sector, specifically Asset Management - Cryptocurrency, with a market capitalization of approximately $23.2M, a beta of 2.70 versus the broader market, a 52-week range of 48.88-118.78, average daily share volume of 3K, a public-listing history dating back to 2021. These structural characteristics shape how BITS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.70 indicates BITS has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. BITS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on BITS?

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.

BITS snapshot

As of August 14, 2026, spot at $55.32, ATM IV 40.50%, IV rank 10.65%, expected move 11.61%. The covered call on BITS below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this covered call structure on BITS specifically: BITS IV at 40.50% is on the cheap side of its 1-year range, which means a premium-selling BITS covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 11.61% (roughly $6.42 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BITS expiries trade a higher absolute premium for lower per-day decay. Position sizing on BITS should anchor to the underlying notional of $55.32 per share and to the trader's directional view on BITS etf.

BITS covered call setup

The BITS covered call below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With BITS at $55.32 on that close, the first option leg uses a $58.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BITS chain at a 35-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 BITS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$55.32	long
Sell 1	Call	$58.00	$1.68

BITS covered call risk and reward

Net Premium / Debit: -$5,364.50
Max Profit (per contract): $435.50
Max Loss (per contract): -$5,363.50
Breakeven(s): $53.65
Risk / Reward Ratio: 0.081

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.

BITS covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on BITS. 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	-100.0%	-$5,363.50
$12.24	-77.9%	-$4,140.45
$24.47	-55.8%	-$2,917.41
$36.70	-33.7%	-$1,694.36
$48.93	-11.5%	-$471.32
$61.16	+10.6%	+$435.50
$73.39	+32.7%	+$435.50
$85.62	+54.8%	+$435.50
$97.85	+76.9%	+$435.50
$110.08	+99.0%	+$435.50

When traders use covered call on BITS

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

BITS thesis for this covered call

The market-implied 1-standard-deviation range for BITS extends from approximately $48.90 on the downside to $61.74 on the upside. A BITS covered call collects premium on an existing long BITS position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether BITS will breach that level within the expiration window. Current BITS IV rank near 10.65% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on BITS at 40.50%. As a Financial Services name, BITS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BITS-specific events.

BITS 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. BITS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BITS alongside the broader basket even when BITS-specific fundamentals are unchanged. Short-premium structures like a covered call on BITS carry tail risk when realized volatility exceeds the implied move; review historical BITS earnings reactions and macro stress periods before sizing. Always rebuild the position from current BITS chain quotes before placing a trade.

Frequently asked questions

What is a covered call on BITS?: A covered call on BITS is the covered call strategy applied to BITS (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 BITS etf at $55.32 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed BITS chain strike and the premiums come straight from that session's bid/ask midpoint.
How are BITS 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 BITS covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 40.50%), the computed maximum profit is $435.50 per contract and the computed maximum loss is -$5,363.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a BITS covered call?: The breakeven for the BITS covered call priced on this page is roughly $53.65 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The BITS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.61%; 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 BITS?: Covered calls on BITS are an income strategy run on existing BITS 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 BITS implied volatility affect this covered call?: BITS ATM IV is at 40.50% with IV rank near 10.65%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.