How are KSTR 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 KSTR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 51.20%), the computed maximum profit is $220.50 per contract and the computed maximum loss is -$2,378.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KSTR covered call?

The breakeven for the KSTR covered call priced on this page is roughly $23.80 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 KSTR market-implied 1-standard-deviation expected move is approximately 14.68%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KSTR implied volatility affect this covered call?

KSTR ATM IV is at 51.20% with IV rank near 18.23%, 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.

KSTR Covered Call Strategy

KSTR (KraneShares SSE STAR Market 50 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 includes the stocks of the top 50 companies by free-float market capitalizations listed on the SSE Science and Technology Innovation Board (the “STAR Board”). It is non-diversified.

KSTR (KraneShares SSE STAR Market 50 Index ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $60.7M, a beta of 1.21 versus the broader market, a 52-week range of 12.97-26.135, average daily share volume of 157K, a public-listing history dating back to 2021. These structural characteristics shape how KSTR etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.21 places KSTR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a covered call on KSTR?

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 KSTR snapshot

As of May 14, 2026, spot at $25.22, ATM IV 51.20%, IV rank 18.23%, expected move 14.68%. The covered call on KSTR 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 63-day expiry.

Why this covered call structure on KSTR specifically: KSTR IV at 51.20% is on the cheap side of its 1-year range, which means a premium-selling KSTR covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 14.68% (roughly $3.70 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated KSTR expiries trade a higher absolute premium for lower per-day decay. Position sizing on KSTR should anchor to the underlying notional of $25.22 per share and to the trader's directional view on KSTR etf.

KSTR covered call setup

The KSTR 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 KSTR near $25.22, the first option leg uses a $26.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KSTR chain at a 63-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 KSTR shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$25.22	long
Sell 1	Call	$26.00	$1.43

KSTR covered call risk and reward

Net Premium / Debit: -$2,379.50
Max Profit (per contract): $220.50
Max Loss (per contract): -$2,378.50
Breakeven(s): $23.80
Risk / Reward Ratio: 0.093

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.

KSTR covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on KSTR. 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%	-$2,378.50
$5.59	-77.9%	-$1,820.98
$11.16	-55.7%	-$1,263.46
$16.74	-33.6%	-$705.95
$22.31	-11.5%	-$148.43
$27.89	+10.6%	+$220.50
$33.46	+32.7%	+$220.50
$39.04	+54.8%	+$220.50
$44.61	+76.9%	+$220.50
$50.19	+99.0%	+$220.50

When traders use covered call on KSTR

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

KSTR thesis for this covered call

The market-implied 1-standard-deviation range for KSTR extends from approximately $21.52 on the downside to $28.92 on the upside. A KSTR covered call collects premium on an existing long KSTR position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether KSTR will breach that level within the expiration window. Current KSTR IV rank near 18.23% 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 KSTR at 51.20%. As a Financial Services name, KSTR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KSTR-specific events.

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

Frequently asked questions

What is a covered call on KSTR?: A covered call on KSTR is the covered call strategy applied to KSTR (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 KSTR etf trading near $25.22, the strikes shown on this page are snapped to the nearest listed KSTR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are KSTR 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 KSTR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 51.20%), the computed maximum profit is $220.50 per contract and the computed maximum loss is -$2,378.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KSTR covered call?: The breakeven for the KSTR covered call priced on this page is roughly $23.80 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 KSTR market-implied 1-standard-deviation expected move is approximately 14.68%; 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 KSTR?: Covered calls on KSTR are an income strategy run on existing KSTR 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 KSTR implied volatility affect this covered call?: KSTR ATM IV is at 51.20% with IV rank near 18.23%, 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.