MAGC Covered Call Strategy
MAGC (Roundhill Investments - China Magnificent Seven ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
The Roundhill China Magnificent Seven ETF (“MAGC”) seeks to offer equal weight exposure to the largest and most innovative Chinese companies (the “China Magnificent Seven”). MAGC currently includes Tencent, PDD Holdings, Alibaba, Meituan, BYD, Xiaomi, and NetEase. MAGC is the first-ever ETF to provide precise exposure to China’s tech leaders.
MAGC (Roundhill Investments - China Magnificent Seven ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $15.3M, a beta of 0.05 versus the broader market, a 52-week range of 19.959-30, average daily share volume of 6K, a public-listing history dating back to 2024. These structural characteristics shape how MAGC etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.05 indicates MAGC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MAGC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on MAGC?
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 MAGC snapshot
As of May 15, 2026, spot at $20.29, ATM IV 41.10%, IV rank 10.61%, expected move 11.78%. The covered call on MAGC 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 126-day expiry.
Why this covered call structure on MAGC specifically: MAGC IV at 41.10% is on the cheap side of its 1-year range, which means a premium-selling MAGC covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 11.78% (roughly $2.39 on the underlying). The 126-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MAGC expiries trade a higher absolute premium for lower per-day decay. Position sizing on MAGC should anchor to the underlying notional of $20.29 per share and to the trader's directional view on MAGC etf.
MAGC covered call setup
The MAGC 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 MAGC near $20.29, the first option leg uses a $21.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MAGC chain at a 126-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 MAGC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $20.29 | long |
| Sell 1 | Call | $21.00 | $1.66 |
MAGC covered call risk and reward
- Net Premium / Debit
- -$1,863.00
- Max Profit (per contract)
- $237.00
- Max Loss (per contract)
- -$1,862.00
- Breakeven(s)
- $18.63
- Risk / Reward Ratio
- 0.127
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.
MAGC covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on MAGC. 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% | -$1,862.00 |
| $4.50 | -77.8% | -$1,413.49 |
| $8.98 | -55.7% | -$964.97 |
| $13.47 | -33.6% | -$516.46 |
| $17.95 | -11.5% | -$67.95 |
| $22.44 | +10.6% | +$237.00 |
| $26.92 | +32.7% | +$237.00 |
| $31.41 | +54.8% | +$237.00 |
| $35.89 | +76.9% | +$237.00 |
| $40.38 | +99.0% | +$237.00 |
When traders use covered call on MAGC
Covered calls on MAGC are an income strategy run on existing MAGC etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
MAGC thesis for this covered call
The market-implied 1-standard-deviation range for MAGC extends from approximately $17.90 on the downside to $22.68 on the upside. A MAGC covered call collects premium on an existing long MAGC position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MAGC will breach that level within the expiration window. Current MAGC IV rank near 10.61% 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 MAGC at 41.10%. As a Financial Services name, MAGC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MAGC-specific events.
MAGC 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. MAGC positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MAGC alongside the broader basket even when MAGC-specific fundamentals are unchanged. Short-premium structures like a covered call on MAGC carry tail risk when realized volatility exceeds the implied move; review historical MAGC earnings reactions and macro stress periods before sizing. Always rebuild the position from current MAGC chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on MAGC?
- A covered call on MAGC is the covered call strategy applied to MAGC (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 MAGC etf trading near $20.29, the strikes shown on this page are snapped to the nearest listed MAGC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MAGC 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 MAGC covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 41.10%), the computed maximum profit is $237.00 per contract and the computed maximum loss is -$1,862.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MAGC covered call?
- The breakeven for the MAGC covered call priced on this page is roughly $18.63 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 MAGC market-implied 1-standard-deviation expected move is approximately 11.78%; 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 MAGC?
- Covered calls on MAGC are an income strategy run on existing MAGC 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 MAGC implied volatility affect this covered call?
- MAGC ATM IV is at 41.10% with IV rank near 10.61%, 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.