BITY Covered Call Strategy
BITY (Amplify Bitcoin 2% Monthly Option Income ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
BITY does not directly invest in Bitcoin but employs a covered call strategy on the price return of Bitcoin. The actively managed fund-of-funds targets 24% annualized option premium. A portion of the funds long exposure comprises of holding ETP shares, as well as buying call options and selling put options with maturities of less than one year. The synthetic covered call strategy via standardized exchange-traded and FLEX options consists of synthetic long exposure, covered call writing, and US Treasurys and cash. The fund writes about 5-10% out-of-the-money call options with maturities of one week or less. The amount varies based on each underlying funds NAV to meet the 24% target.
BITY (Amplify Bitcoin 2% Monthly Option Income ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $13.5M, a beta of 1.45 versus the broader market, a 52-week range of 23.749-59, average daily share volume of 5K, a public-listing history dating back to 2025. These structural characteristics shape how BITY etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.45 indicates BITY has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. BITY pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on BITY?
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.
BITY snapshot
As of September 29, 2026, spot at $28.04, ATM IV 13.80%, IV rank 0.33%, expected move 3.96%. The covered call on BITY below is built from the September 29, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 80-day expiry.
Why this covered call structure on BITY specifically: BITY IV at 13.80% is on the cheap side of its 1-year range, which means a premium-selling BITY covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 3.96% (roughly $1.11 on the underlying). The 80-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated BITY expiries trade a higher absolute premium for lower per-day decay. Position sizing on BITY should anchor to the underlying notional of $28.04 per share and to the trader's directional view on BITY etf.
BITY covered call setup
The BITY covered call below is built from the September 29, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With BITY at $28.04 on that close, the first option leg uses a $29.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed BITY chain at a 80-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 BITY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $28.04 | long |
| Sell 1 | Call | $29.00 | $0.74 |
BITY covered call risk and reward
- Net Premium / Debit
- -$2,730.00
- Max Profit (per contract)
- $170.00
- Max Loss (per contract)
- -$2,729.00
- Breakeven(s)
- $27.30
- Risk / Reward Ratio
- 0.062
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.
BITY covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on BITY. 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.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$2,729.00 |
| $6.21 | -77.9% | -$2,109.13 |
| $12.41 | -55.8% | -$1,489.26 |
| $18.61 | -33.6% | -$869.39 |
| $24.80 | -11.5% | -$249.52 |
| $31.00 | +10.6% | +$170.00 |
| $37.20 | +32.7% | +$170.00 |
| $43.40 | +54.8% | +$170.00 |
| $49.60 | +76.9% | +$170.00 |
| $55.80 | +99.0% | +$170.00 |
When traders use covered call on BITY
Covered calls on BITY are an income strategy run on existing BITY etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
BITY thesis for this covered call
The market-implied 1-standard-deviation range for BITY extends from approximately $26.93 on the downside to $29.15 on the upside. A BITY covered call collects premium on an existing long BITY position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether BITY will breach that level within the expiration window. Current BITY IV rank near 0.33% 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 BITY at 13.80%. As a Financial Services name, BITY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to BITY-specific events.
BITY 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. BITY positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move BITY alongside the broader basket even when BITY-specific fundamentals are unchanged. Short-premium structures like a covered call on BITY carry tail risk when realized volatility exceeds the implied move; review historical BITY earnings reactions and macro stress periods before sizing. Always rebuild the position from current BITY chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on BITY?
- A covered call on BITY is the covered call strategy applied to BITY (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 BITY etf at $28.04 on the September 29, 2026 close, the strikes shown on this page are snapped to the nearest listed BITY chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are BITY 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 BITY covered call priced from the September 29, 2026 end-of-day chain at a 30-day expiry (ATM IV 13.80%), the computed maximum profit is $170.00 per contract and the computed maximum loss is -$2,729.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a BITY covered call?
- The breakeven for the BITY covered call priced on this page is roughly $27.30 at expiration, derived from the September 29, 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 BITY market-implied 1-standard-deviation expected move in the same options snapshot is approximately 3.96%; 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 BITY?
- Covered calls on BITY are an income strategy run on existing BITY 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 BITY implied volatility affect this covered call?
- BITY ATM IV is at 13.80% with IV rank near 0.33%, 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.