How are CHAU 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 CHAU covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 55.20%), the computed maximum profit is $218.50 per contract and the computed maximum loss is -$2,380.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CHAU covered call?

The breakeven for the CHAU covered call priced on this page is roughly $23.81 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 CHAU market-implied 1-standard-deviation expected move is approximately 15.83%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CHAU implied volatility affect this covered call?

CHAU ATM IV is at 55.20% with IV rank near 79.14%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

CHAU Covered Call Strategy

CHAU (Direxion Daily CSI 300 China A Share Bull 2X Shares), in the Financial Services sector, (Asset Management industry), listed on AMEX.

The index is a modified free-float market capitalization weighted index comprised of the largest and most liquid stocks in the Chinese A-share market. The fund, under normal circumstances, invests at least 80% of its net assets in financial instruments, such as swap agreements, securities of the index, and ETFs that track the index, that, in combination, provide 2X daily leveraged exposure to the index, consistent with the fund's investment objective. It is non-diversified.

CHAU (Direxion Daily CSI 300 China A Share Bull 2X Shares) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $194.4M, a beta of 0.88 versus the broader market, a 52-week range of 14.68-26.1, average daily share volume of 122K, a public-listing history dating back to 2015. These structural characteristics shape how CHAU etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.88 places CHAU roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. CHAU pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on CHAU?

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 CHAU snapshot

As of June 29, 2026, spot at $24.39, ATM IV 55.20%, IV rank 79.14%, expected move 15.83%. The covered call on CHAU 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 18-day expiry.

Why this covered call structure on CHAU specifically: CHAU IV at 55.20% is rich versus its 1-year range, which favors premium-selling structures like a CHAU covered call, with a market-implied 1-standard-deviation move of approximately 15.83% (roughly $3.86 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CHAU expiries trade a higher absolute premium for lower per-day decay. Position sizing on CHAU should anchor to the underlying notional of $24.39 per share and to the trader's directional view on CHAU etf.

CHAU covered call setup

The CHAU 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 CHAU near $24.39, the first option leg uses a $26.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CHAU chain at a 18-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 CHAU shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$24.39	long
Sell 1	Call	$26.00	$0.58

CHAU covered call risk and reward

Net Premium / Debit: -$2,381.50
Max Profit (per contract): $218.50
Max Loss (per contract): -$2,380.50
Breakeven(s): $23.81
Risk / Reward Ratio: 0.092

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.

CHAU covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on CHAU. 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%	-$2,380.50
$5.40	-77.9%	-$1,841.33
$10.79	-55.7%	-$1,302.17
$16.18	-33.6%	-$763.00
$21.58	-11.5%	-$223.84
$26.97	+10.6%	+$218.50
$32.36	+32.7%	+$218.50
$37.75	+54.8%	+$218.50
$43.14	+76.9%	+$218.50
$48.53	+99.0%	+$218.50

When traders use covered call on CHAU

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

CHAU thesis for this covered call

The market-implied 1-standard-deviation range for CHAU extends from approximately $20.53 on the downside to $28.25 on the upside. A CHAU covered call collects premium on an existing long CHAU position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CHAU will breach that level within the expiration window. Current CHAU IV rank near 79.14% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on CHAU at 55.20%. As a Financial Services name, CHAU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CHAU-specific events.

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

Frequently asked questions

What is a covered call on CHAU?: A covered call on CHAU is the covered call strategy applied to CHAU (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 CHAU etf trading near $24.39, the strikes shown on this page are snapped to the nearest listed CHAU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CHAU 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 CHAU covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 55.20%), the computed maximum profit is $218.50 per contract and the computed maximum loss is -$2,380.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CHAU covered call?: The breakeven for the CHAU covered call priced on this page is roughly $23.81 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 CHAU market-implied 1-standard-deviation expected move is approximately 15.83%; 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 CHAU?: Covered calls on CHAU are an income strategy run on existing CHAU 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 CHAU implied volatility affect this covered call?: CHAU ATM IV is at 55.20% with IV rank near 79.14%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.