How are COLO 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 COLO covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 22.00%), the computed maximum profit is $173.00 per contract and the computed maximum loss is -$4,826.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a COLO covered call?

The breakeven for the COLO covered call priced on this page is roughly $48.27 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 COLO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.31%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current COLO implied volatility affect this covered call?

COLO ATM IV is at 22.00% with IV rank near 1.89%, 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.

COLO Covered Call Strategy

COLO (Global X - MSCI Colombia ETF), in the Financial Services sector, (Asset Management - Global industry), listed on AMEX.

The Global X MSCI Colombia ETF (COLO) aims to replicate the financial performance, encompassing both capital appreciation and dividend income, of the MSCI All Colombia Select 25/50 Index, before factoring in any fund-related fees and expenses.

COLO (Global X - MSCI Colombia ETF) trades in the Financial Services sector, specifically Asset Management - Global, with a market capitalization of approximately $143.9M, a beta of 0.45 versus the broader market, a 52-week range of 30.71-48.79, average daily share volume of 189K, a public-listing history dating back to 2009. These structural characteristics shape how COLO etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.45 indicates COLO has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. COLO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on COLO?

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.

COLO snapshot

As of August 14, 2026, spot at $48.53, ATM IV 22.00%, IV rank 1.89%, expected move 6.31%. The covered call on COLO 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 COLO specifically: COLO IV at 22.00% is on the cheap side of its 1-year range, which means a premium-selling COLO covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 6.31% (roughly $3.06 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 COLO expiries trade a higher absolute premium for lower per-day decay. Position sizing on COLO should anchor to the underlying notional of $48.53 per share and to the trader's directional view on COLO etf.

COLO covered call setup

The COLO 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 COLO at $48.53 on that close, the first option leg uses a $50.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed COLO 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 COLO shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$48.53	long
Sell 1	Call	$50.00	$0.26

COLO covered call risk and reward

Net Premium / Debit: -$4,827.00
Max Profit (per contract): $173.00
Max Loss (per contract): -$4,826.00
Breakeven(s): $48.27
Risk / Reward Ratio: 0.036

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.

COLO covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on COLO. 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%	-$4,826.00
$10.74	-77.9%	-$3,753.09
$21.47	-55.8%	-$2,680.17
$32.20	-33.7%	-$1,607.26
$42.93	-11.5%	-$534.34
$53.66	+10.6%	+$173.00
$64.38	+32.7%	+$173.00
$75.11	+54.8%	+$173.00
$85.84	+76.9%	+$173.00
$96.57	+99.0%	+$173.00

When traders use covered call on COLO

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

COLO thesis for this covered call

The market-implied 1-standard-deviation range for COLO extends from approximately $45.47 on the downside to $51.59 on the upside. A COLO covered call collects premium on an existing long COLO position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether COLO will breach that level within the expiration window. Current COLO IV rank near 1.89% 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 COLO at 22.00%. As a Financial Services name, COLO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to COLO-specific events.

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

Frequently asked questions

What is a covered call on COLO?: A covered call on COLO is the covered call strategy applied to COLO (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 COLO etf at $48.53 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed COLO chain strike and the premiums come straight from that session's bid/ask midpoint.
How are COLO 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 COLO covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 22.00%), the computed maximum profit is $173.00 per contract and the computed maximum loss is -$4,826.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a COLO covered call?: The breakeven for the COLO covered call priced on this page is roughly $48.27 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 COLO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.31%; 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 COLO?: Covered calls on COLO are an income strategy run on existing COLO 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 COLO implied volatility affect this covered call?: COLO ATM IV is at 22.00% with IV rank near 1.89%, 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.