How are MEMX 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 MEMX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 257.70%), the computed maximum profit is $1,063.00 per contract and the computed maximum loss is -$3,136.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MEMX covered call?

The breakeven for the MEMX covered call priced on this page is roughly $31.37 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 MEMX market-implied 1-standard-deviation expected move is approximately 73.88%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MEMX implied volatility affect this covered call?

MEMX ATM IV is at 257.70% with IV rank near 100.00%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

MEMX Covered Call Strategy

MEMX (Matthews Emerging Markets ex China Active ETF MEMX), in the Financial Services sector, (Asset Management - Global industry), listed on AMEX.

The fund's primary goal is typically met by dedicating at least 80% of its total assets (including any borrowed capital used for investment) to the common and preferred shares of businesses operating in emerging market countries, explicitly excluding China. While the portfolio may include holdings in companies from developed nations or China, a key constraint applies: at the moment of acquisition, the fund cannot buy shares in any company based in a developed country or China if its combined exposure to these regions already exceeds 20% of its assets.

MEMX (Matthews Emerging Markets ex China Active ETF MEMX) trades in the Financial Services sector, specifically Asset Management - Global, with a market capitalization of approximately $49.8M, a beta of 1.18 versus the broader market, a 52-week range of 32.5-51.52, average daily share volume of 3K, a public-listing history dating back to 2023. These structural characteristics shape how MEMX etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.18 places MEMX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MEMX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on MEMX?

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 MEMX snapshot

As of June 30, 2026, spot at $39.87, ATM IV 257.70%, IV rank 100.00%, expected move 73.88%. The covered call on MEMX 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 80-day expiry.

Why this covered call structure on MEMX specifically: MEMX IV at 257.70% is rich versus its 1-year range, which favors premium-selling structures like a MEMX covered call, with a market-implied 1-standard-deviation move of approximately 73.88% (roughly $29.46 on the underlying). The 80-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MEMX expiries trade a higher absolute premium for lower per-day decay. Position sizing on MEMX should anchor to the underlying notional of $39.87 per share and to the trader's directional view on MEMX etf.

MEMX covered call setup

The MEMX 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 MEMX near $39.87, the first option leg uses a $42.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MEMX chain at a 80-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 MEMX shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$39.87	long
Sell 1	Call	$42.00	$8.50

MEMX covered call risk and reward

Net Premium / Debit: -$3,137.00
Max Profit (per contract): $1,063.00
Max Loss (per contract): -$3,136.00
Breakeven(s): $31.37
Risk / Reward Ratio: 0.339

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.

MEMX covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on MEMX. 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	-100.0%	-$3,136.00
$8.82	-77.9%	-$2,254.56
$17.64	-55.8%	-$1,373.13
$26.45	-33.7%	-$491.69
$35.27	-11.5%	+$389.75
$44.08	+10.6%	+$1,063.00
$52.90	+32.7%	+$1,063.00
$61.71	+54.8%	+$1,063.00
$70.52	+76.9%	+$1,063.00
$79.34	+99.0%	+$1,063.00

When traders use covered call on MEMX

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

MEMX thesis for this covered call

The market-implied 1-standard-deviation range for MEMX extends from approximately $10.41 on the downside to $69.33 on the upside. A MEMX covered call collects premium on an existing long MEMX position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MEMX will breach that level within the expiration window. Current MEMX IV rank near 100.00% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on MEMX at 257.70%. As a Financial Services name, MEMX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MEMX-specific events.

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

Frequently asked questions

What is a covered call on MEMX?: A covered call on MEMX is the covered call strategy applied to MEMX (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 MEMX etf trading near $39.87, the strikes shown on this page are snapped to the nearest listed MEMX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MEMX 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 MEMX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 257.70%), the computed maximum profit is $1,063.00 per contract and the computed maximum loss is -$3,136.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MEMX covered call?: The breakeven for the MEMX covered call priced on this page is roughly $31.37 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 MEMX market-implied 1-standard-deviation expected move is approximately 73.88%; 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 MEMX?: Covered calls on MEMX are an income strategy run on existing MEMX 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 MEMX implied volatility affect this covered call?: MEMX ATM IV is at 257.70% with IV rank near 100.00%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.