How are TECS 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 TECS covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 108.90%), the computed maximum profit is $81.50 per contract and the computed maximum loss is -$617.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a TECS covered call?

The breakeven for the TECS covered call priced on this page is roughly $6.19 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 TECS market-implied 1-standard-deviation expected move is approximately 31.22%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TECS implied volatility affect this covered call?

TECS ATM IV is at 108.90% with IV rank near 81.57%, 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.

TECS Covered Call Strategy

TECS (Direxion Daily Technology Bear 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.

These Direxion Daily Technology Bull and Bear 3X ETFs are designed to generate daily returns that, before accounting for fees and charges, either amplify (300%) or inversely multiply (300%) the performance of the Technology Select Sector Index. However, there is no assurance that these funds will consistently achieve their stated investment targets.

TECS (Direxion Daily Technology Bear 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $93.4M, a beta of -3.63 versus the broader market, a 52-week range of 5.9-27.98, average daily share volume of 7.2M, a public-listing history dating back to 2008. These structural characteristics shape how TECS etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -3.63 indicates TECS has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. TECS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on TECS?

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 TECS snapshot

As of June 29, 2026, spot at $6.71, ATM IV 108.90%, IV rank 81.57%, expected move 31.22%. The covered call on TECS 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 18-day expiry.

Why this covered call structure on TECS specifically: TECS IV at 108.90% is rich versus its 1-year range, which favors premium-selling structures like a TECS covered call, with a market-implied 1-standard-deviation move of approximately 31.22% (roughly $2.09 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TECS expiries trade a higher absolute premium for lower per-day decay. Position sizing on TECS should anchor to the underlying notional of $6.71 per share and to the trader's directional view on TECS etf.

TECS covered call setup

The TECS 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 TECS near $6.71, the first option leg uses a $7.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TECS chain at a 18-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 TECS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$6.71	long
Sell 1	Call	$7.00	$0.53

TECS covered call risk and reward

Net Premium / Debit: -$618.50
Max Profit (per contract): $81.50
Max Loss (per contract): -$617.50
Breakeven(s): $6.19
Risk / Reward Ratio: 0.132

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.

TECS covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on TECS. 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	-99.9%	-$617.50
$1.49	-77.8%	-$469.25
$2.98	-55.7%	-$321.00
$4.46	-33.6%	-$172.75
$5.94	-11.5%	-$24.49
$7.42	+10.6%	+$81.50
$8.91	+32.7%	+$81.50
$10.39	+54.8%	+$81.50
$11.87	+76.9%	+$81.50
$13.35	+99.0%	+$81.50

When traders use covered call on TECS

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

TECS thesis for this covered call

The market-implied 1-standard-deviation range for TECS extends from approximately $4.62 on the downside to $8.80 on the upside. A TECS covered call collects premium on an existing long TECS position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether TECS will breach that level within the expiration window. Current TECS IV rank near 81.57% 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 TECS at 108.90%. As a Financial Services name, TECS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TECS-specific events.

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

Frequently asked questions

What is a covered call on TECS?: A covered call on TECS is the covered call strategy applied to TECS (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 TECS etf trading near $6.71, the strikes shown on this page are snapped to the nearest listed TECS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are TECS 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 TECS covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 108.90%), the computed maximum profit is $81.50 per contract and the computed maximum loss is -$617.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a TECS covered call?: The breakeven for the TECS covered call priced on this page is roughly $6.19 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 TECS market-implied 1-standard-deviation expected move is approximately 31.22%; 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 TECS?: Covered calls on TECS are an income strategy run on existing TECS 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 TECS implied volatility affect this covered call?: TECS ATM IV is at 108.90% with IV rank near 81.57%, 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.