DTH Covered Call Strategy
DTH (WisdomTree International High Dividend Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.
Under normal circumstances, at least 95% of the fund's total assets (exclusive of collateral held from securities lending) will be invested in component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. The index is a fundamentally weighted index that is comprised of companies with high dividend yields selected from the WisdomTree International Equity Index. The fund is non-diversified.
DTH (WisdomTree International High Dividend Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $688.9M, a beta of 0.83 versus the broader market, a 52-week range of 44.35-58.04, average daily share volume of 55K, a public-listing history dating back to 2006. These structural characteristics shape how DTH etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.83 places DTH roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DTH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on DTH?
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 DTH snapshot
As of May 15, 2026, spot at $55.55, ATM IV 32.90%, IV rank 30.16%, expected move 9.43%. The covered call on DTH 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 34-day expiry.
Why this covered call structure on DTH specifically: DTH IV at 32.90% is mid-range versus its 1-year history, so the credit collected on a DTH covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 9.43% (roughly $5.24 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DTH expiries trade a higher absolute premium for lower per-day decay. Position sizing on DTH should anchor to the underlying notional of $55.55 per share and to the trader's directional view on DTH etf.
DTH covered call setup
The DTH 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 DTH near $55.55, 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 DTH chain at a 34-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 DTH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $55.55 | long |
| Sell 1 | Call | $58.00 | $1.35 |
DTH covered call risk and reward
- Net Premium / Debit
- -$5,420.00
- Max Profit (per contract)
- $380.00
- Max Loss (per contract)
- -$5,419.00
- Breakeven(s)
- $54.20
- Risk / Reward Ratio
- 0.070
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.
DTH covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on DTH. 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% | -$5,419.00 |
| $12.29 | -77.9% | -$4,190.87 |
| $24.57 | -55.8% | -$2,962.74 |
| $36.85 | -33.7% | -$1,734.61 |
| $49.14 | -11.5% | -$506.48 |
| $61.42 | +10.6% | +$380.00 |
| $73.70 | +32.7% | +$380.00 |
| $85.98 | +54.8% | +$380.00 |
| $98.26 | +76.9% | +$380.00 |
| $110.54 | +99.0% | +$380.00 |
When traders use covered call on DTH
Covered calls on DTH are an income strategy run on existing DTH etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
DTH thesis for this covered call
The market-implied 1-standard-deviation range for DTH extends from approximately $50.31 on the downside to $60.79 on the upside. A DTH covered call collects premium on an existing long DTH position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether DTH will breach that level within the expiration window. Current DTH IV rank near 30.16% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on DTH should anchor more to the directional view and the expected-move geometry. As a Financial Services name, DTH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DTH-specific events.
DTH 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. DTH positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DTH alongside the broader basket even when DTH-specific fundamentals are unchanged. Short-premium structures like a covered call on DTH carry tail risk when realized volatility exceeds the implied move; review historical DTH earnings reactions and macro stress periods before sizing. Always rebuild the position from current DTH chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on DTH?
- A covered call on DTH is the covered call strategy applied to DTH (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 DTH etf trading near $55.55, the strikes shown on this page are snapped to the nearest listed DTH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DTH 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 DTH covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 32.90%), the computed maximum profit is $380.00 per contract and the computed maximum loss is -$5,419.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DTH covered call?
- The breakeven for the DTH covered call priced on this page is roughly $54.20 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 DTH market-implied 1-standard-deviation expected move is approximately 9.43%; 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 DTH?
- Covered calls on DTH are an income strategy run on existing DTH 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 DTH implied volatility affect this covered call?
- DTH ATM IV is at 32.90% with IV rank near 30.16%, 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.