How are KEMX 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 KEMX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 31.60%), the computed maximum profit is $310.00 per contract and the computed maximum loss is -$4,789.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KEMX covered call?

The breakeven for the KEMX covered call priced on this page is roughly $47.90 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 KEMX market-implied 1-standard-deviation expected move is approximately 9.06%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KEMX implied volatility affect this covered call?

KEMX ATM IV is at 31.60% with IV rank near 9.70%, 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.

KEMX Covered Call Strategy

KEMX (KraneShares MSCI Emerging Markets ex China Index ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.

Under normal circumstances, the fund will invest at least 80% of its net assets (plus borrowings for investment purposes) in instruments in its underlying index or in instruments that have economic characteristics similar to those in the underlying index. The underlying index is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of mid- and large-cap companies of emerging market countries, excluding China.

KEMX (KraneShares MSCI Emerging Markets ex China Index ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $117.0M, a beta of 1.23 versus the broader market, a 52-week range of 29.92-50.179, average daily share volume of 28K, a public-listing history dating back to 2019. These structural characteristics shape how KEMX etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.23 places KEMX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. KEMX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on KEMX?

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 KEMX snapshot

As of May 13, 2026, spot at $48.93, ATM IV 31.60%, IV rank 9.70%, expected move 9.06%. The covered call on KEMX 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 KEMX specifically: KEMX IV at 31.60% is on the cheap side of its 1-year range, which means a premium-selling KEMX covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 9.06% (roughly $4.43 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 KEMX expiries trade a higher absolute premium for lower per-day decay. Position sizing on KEMX should anchor to the underlying notional of $48.93 per share and to the trader's directional view on KEMX etf.

KEMX covered call setup

The KEMX 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 KEMX near $48.93, the first option leg uses a $51.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KEMX 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 KEMX shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$48.93	long
Sell 1	Call	$51.00	$1.03

KEMX covered call risk and reward

Net Premium / Debit: -$4,790.00
Max Profit (per contract): $310.00
Max Loss (per contract): -$4,789.00
Breakeven(s): $47.90
Risk / Reward Ratio: 0.065

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.

KEMX covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on KEMX. 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%	-$4,789.00
$10.83	-77.9%	-$3,707.24
$21.65	-55.8%	-$2,625.48
$32.46	-33.7%	-$1,543.72
$43.28	-11.5%	-$461.96
$54.10	+10.6%	+$310.00
$64.92	+32.7%	+$310.00
$75.73	+54.8%	+$310.00
$86.55	+76.9%	+$310.00
$97.37	+99.0%	+$310.00

When traders use covered call on KEMX

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

KEMX thesis for this covered call

The market-implied 1-standard-deviation range for KEMX extends from approximately $44.50 on the downside to $53.36 on the upside. A KEMX covered call collects premium on an existing long KEMX position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether KEMX will breach that level within the expiration window. Current KEMX IV rank near 9.70% 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 KEMX at 31.60%. As a Financial Services name, KEMX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KEMX-specific events.

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

Frequently asked questions

What is a covered call on KEMX?: A covered call on KEMX is the covered call strategy applied to KEMX (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 KEMX etf trading near $48.93, the strikes shown on this page are snapped to the nearest listed KEMX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are KEMX 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 KEMX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 31.60%), the computed maximum profit is $310.00 per contract and the computed maximum loss is -$4,789.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KEMX covered call?: The breakeven for the KEMX covered call priced on this page is roughly $47.90 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 KEMX market-implied 1-standard-deviation expected move is approximately 9.06%; 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 KEMX?: Covered calls on KEMX are an income strategy run on existing KEMX 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 KEMX implied volatility affect this covered call?: KEMX ATM IV is at 31.60% with IV rank near 9.70%, 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.