How are EDZ 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 EDZ covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 108.60%), the computed maximum profit is $196.00 per contract and the computed maximum loss is -$1,403.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a EDZ covered call?

The breakeven for the EDZ covered call priced on this page is roughly $14.04 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 EDZ market-implied 1-standard-deviation expected move is approximately 31.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current EDZ implied volatility affect this covered call?

EDZ ATM IV is at 108.60% with IV rank near 56.89%, 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.

EDZ Covered Call Strategy

EDZ (Direxion Daily MSCI Emerging Markets Bear 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.

The Direxion Daily MSCI Emerging Markets Bear 3X ETF (EDZ) is structured to deliver daily investment outcomes that reflect three times the inverse (or opposite) performance of the MSCI Emerging Markets Index. This target is measured before accounting for any fees or expenses. Investors should be aware, however, that there is no certainty these funds will consistently achieve their stated daily investment objectives.

EDZ (Direxion Daily MSCI Emerging Markets Bear 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $6.7M, a beta of -2.22 versus the broader market, a 52-week range of 13.06-55.2, average daily share volume of 337K, a public-listing history dating back to 2008. These structural characteristics shape how EDZ etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -2.22 indicates EDZ has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. EDZ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on EDZ?

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 EDZ snapshot

As of June 29, 2026, spot at $15.24, ATM IV 108.60%, IV rank 56.89%, expected move 31.13%. The covered call on EDZ 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 EDZ specifically: EDZ IV at 108.60% is mid-range versus its 1-year history, so the credit collected on a EDZ covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 31.13% (roughly $4.74 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 EDZ expiries trade a higher absolute premium for lower per-day decay. Position sizing on EDZ should anchor to the underlying notional of $15.24 per share and to the trader's directional view on EDZ etf.

EDZ covered call setup

The EDZ 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 EDZ near $15.24, the first option leg uses a $16.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EDZ 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 EDZ shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$15.24	long
Sell 1	Call	$16.00	$1.20

EDZ covered call risk and reward

Net Premium / Debit: -$1,404.00
Max Profit (per contract): $196.00
Max Loss (per contract): -$1,403.00
Breakeven(s): $14.04
Risk / Reward Ratio: 0.140

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.

EDZ covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on EDZ. 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	-99.9%	-$1,403.00
$3.38	-77.8%	-$1,066.15
$6.75	-55.7%	-$729.29
$10.12	-33.6%	-$392.44
$13.48	-11.5%	-$55.58
$16.85	+10.6%	+$196.00
$20.22	+32.7%	+$196.00
$23.59	+54.8%	+$196.00
$26.96	+76.9%	+$196.00
$30.33	+99.0%	+$196.00

When traders use covered call on EDZ

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

EDZ thesis for this covered call

The market-implied 1-standard-deviation range for EDZ extends from approximately $10.50 on the downside to $19.98 on the upside. A EDZ covered call collects premium on an existing long EDZ position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether EDZ will breach that level within the expiration window. Current EDZ IV rank near 56.89% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on EDZ should anchor more to the directional view and the expected-move geometry. As a Financial Services name, EDZ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EDZ-specific events.

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

Frequently asked questions

What is a covered call on EDZ?: A covered call on EDZ is the covered call strategy applied to EDZ (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 EDZ etf trading near $15.24, the strikes shown on this page are snapped to the nearest listed EDZ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are EDZ 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 EDZ covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 108.60%), the computed maximum profit is $196.00 per contract and the computed maximum loss is -$1,403.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a EDZ covered call?: The breakeven for the EDZ covered call priced on this page is roughly $14.04 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 EDZ market-implied 1-standard-deviation expected move is approximately 31.13%; 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 EDZ?: Covered calls on EDZ are an income strategy run on existing EDZ 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 EDZ implied volatility affect this covered call?: EDZ ATM IV is at 108.60% with IV rank near 56.89%, 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.