TEMT Covered Call Strategy
TEMT (Investment Managers Series Trust II - Tradr 2X Long TEM Daily ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
TEMT is a leveraged ETF seeking to provide twice the daily performance of Tempus Al Inc., a healthcare AI firm. The fund's objective is strictly for daily returns and is not designed for long-term investment. To meet its leverage goal, the fund primarily engages in swap agreements, options, and direct holdings of Tempus Al (TEM) stock, actively rebalancing each trading day. Its performance is highly tied to TEM's daily price movements and may experience increased volatility compared to traditional funds. Due to its use of derivatives and leverage, the fund should be monitored regularly, as it is intended for short-term trading rather than long-term investing. The fund's concentration reflects TEM's focus on healthcare technology, and its results can vary considerably depending on underlying stock and sector movements.
TEMT (Investment Managers Series Trust II - Tradr 2X Long TEM Daily ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $58.6M, a beta of 5.22 versus the broader market, a 52-week range of 11.52-152.22, average daily share volume of 281K, a public-listing history dating back to 2025. These structural characteristics shape how TEMT etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 5.22 indicates TEMT has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. TEMT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on TEMT?
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.
TEMT snapshot
As of September 29, 2026, spot at $39.53, ATM IV 148.20%, IV rank 39.87%, expected move 42.49%. The covered call on TEMT below is built from the September 29, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 17-day expiry.
Why this covered call structure on TEMT specifically: TEMT IV at 148.20% is mid-range versus its 1-year history, so the credit collected on a TEMT covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 42.49% (roughly $16.80 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TEMT expiries trade a higher absolute premium for lower per-day decay. Position sizing on TEMT should anchor to the underlying notional of $39.53 per share and to the trader's directional view on TEMT etf.
TEMT covered call setup
The TEMT covered call below is built from the September 29, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With TEMT at $39.53 on that close, the first option leg uses a $40.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TEMT chain at a 17-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 TEMT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $39.53 | long |
| Sell 1 | Call | $40.00 | $4.95 |
TEMT covered call risk and reward
- Net Premium / Debit
- -$3,458.00
- Max Profit (per contract)
- $542.00
- Max Loss (per contract)
- -$3,457.00
- Breakeven(s)
- $34.58
- Risk / Reward Ratio
- 0.157
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.
TEMT covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on TEMT. 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% | -$3,457.00 |
| $8.75 | -77.9% | -$2,583.08 |
| $17.49 | -55.8% | -$1,709.16 |
| $26.23 | -33.7% | -$835.24 |
| $34.97 | -11.5% | +$38.68 |
| $43.71 | +10.6% | +$542.00 |
| $52.45 | +32.7% | +$542.00 |
| $61.18 | +54.8% | +$542.00 |
| $69.92 | +76.9% | +$542.00 |
| $78.66 | +99.0% | +$542.00 |
When traders use covered call on TEMT
Covered calls on TEMT are an income strategy run on existing TEMT etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
TEMT thesis for this covered call
The market-implied 1-standard-deviation range for TEMT extends from approximately $22.73 on the downside to $56.33 on the upside. A TEMT covered call collects premium on an existing long TEMT position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether TEMT will breach that level within the expiration window. Current TEMT IV rank near 39.87% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on TEMT should anchor more to the directional view and the expected-move geometry. As a Financial Services name, TEMT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TEMT-specific events.
TEMT 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. TEMT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TEMT alongside the broader basket even when TEMT-specific fundamentals are unchanged. Short-premium structures like a covered call on TEMT carry tail risk when realized volatility exceeds the implied move; review historical TEMT earnings reactions and macro stress periods before sizing. Always rebuild the position from current TEMT chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on TEMT?
- A covered call on TEMT is the covered call strategy applied to TEMT (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 TEMT etf at $39.53 on the September 29, 2026 close, the strikes shown on this page are snapped to the nearest listed TEMT chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are TEMT 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 TEMT covered call priced from the September 29, 2026 end-of-day chain at a 30-day expiry (ATM IV 148.20%), the computed maximum profit is $542.00 per contract and the computed maximum loss is -$3,457.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TEMT covered call?
- The breakeven for the TEMT covered call priced on this page is roughly $34.58 at expiration, derived from the September 29, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The TEMT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 42.49%; 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 TEMT?
- Covered calls on TEMT are an income strategy run on existing TEMT 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 TEMT implied volatility affect this covered call?
- TEMT ATM IV is at 148.20% with IV rank near 39.87%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.