FTLS Covered Call Strategy
FTLS (First Trust Long/Short Equity ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Fund's investment objective is to seek to provide investors with long term total return. The Fund intends to pursue its investment objective by establishing long and short positions in a portfolio of Equity Securities.
FTLS (First Trust Long/Short Equity ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $2.30B, a beta of 0.50 versus the broader market, a 52-week range of 64.47-74.79, average daily share volume of 93K, a public-listing history dating back to 2014. These structural characteristics shape how FTLS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.50 indicates FTLS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FTLS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on FTLS?
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 FTLS snapshot
As of May 15, 2026, spot at $74.09, ATM IV 22.70%, IV rank 16.98%, expected move 6.51%. The covered call on FTLS 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 FTLS specifically: FTLS IV at 22.70% is on the cheap side of its 1-year range, which means a premium-selling FTLS covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 6.51% (roughly $4.82 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 FTLS expiries trade a higher absolute premium for lower per-day decay. Position sizing on FTLS should anchor to the underlying notional of $74.09 per share and to the trader's directional view on FTLS etf.
FTLS covered call setup
The FTLS 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 FTLS near $74.09, the first option leg uses a $78.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FTLS 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 FTLS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $74.09 | long |
| Sell 1 | Call | $78.00 | $0.78 |
FTLS covered call risk and reward
- Net Premium / Debit
- -$7,331.00
- Max Profit (per contract)
- $469.00
- Max Loss (per contract)
- -$7,330.00
- Breakeven(s)
- $73.31
- Risk / Reward Ratio
- 0.064
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.
FTLS covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on FTLS. 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% | -$7,330.00 |
| $16.39 | -77.9% | -$5,691.94 |
| $32.77 | -55.8% | -$4,053.88 |
| $49.15 | -33.7% | -$2,415.82 |
| $65.53 | -11.6% | -$777.76 |
| $81.91 | +10.6% | +$469.00 |
| $98.29 | +32.7% | +$469.00 |
| $114.67 | +54.8% | +$469.00 |
| $131.05 | +76.9% | +$469.00 |
| $147.44 | +99.0% | +$469.00 |
When traders use covered call on FTLS
Covered calls on FTLS are an income strategy run on existing FTLS etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
FTLS thesis for this covered call
The market-implied 1-standard-deviation range for FTLS extends from approximately $69.27 on the downside to $78.91 on the upside. A FTLS covered call collects premium on an existing long FTLS position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether FTLS will breach that level within the expiration window. Current FTLS IV rank near 16.98% 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 FTLS at 22.70%. As a Financial Services name, FTLS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FTLS-specific events.
FTLS 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. FTLS positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FTLS alongside the broader basket even when FTLS-specific fundamentals are unchanged. Short-premium structures like a covered call on FTLS carry tail risk when realized volatility exceeds the implied move; review historical FTLS earnings reactions and macro stress periods before sizing. Always rebuild the position from current FTLS chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on FTLS?
- A covered call on FTLS is the covered call strategy applied to FTLS (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 FTLS etf trading near $74.09, the strikes shown on this page are snapped to the nearest listed FTLS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are FTLS 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 FTLS covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 22.70%), the computed maximum profit is $469.00 per contract and the computed maximum loss is -$7,330.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FTLS covered call?
- The breakeven for the FTLS covered call priced on this page is roughly $73.31 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 FTLS market-implied 1-standard-deviation expected move is approximately 6.51%; 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 FTLS?
- Covered calls on FTLS are an income strategy run on existing FTLS 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 FTLS implied volatility affect this covered call?
- FTLS ATM IV is at 22.70% with IV rank near 16.98%, 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.