How are TMF 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 TMF covered call priced from the September 30, 2026 end-of-day chain at a 30-day expiry (ATM IV 49.80%), the computed maximum profit is $233.00 per contract and the computed maximum loss is -$2,466.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a TMF covered call?

The breakeven for the TMF covered call priced on this page is roughly $24.67 at expiration, derived from the September 30, 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 TMF market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.28%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TMF implied volatility affect this covered call?

TMF ATM IV is at 49.80% 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.

TMF Covered Call Strategy

TMF (Direxion Daily 20+ Year Treasury Bull 3X ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.

The Direxion Daily 20+ Year Treasury Bull & Bear 3X ETFs endeavor to achieve daily investment outcomes, before accounting for fees and expenses. Specifically, these outcomes aim to replicate either 300% of the daily performance of the ICE U.S. Treasury 20+ Year Bond Index, or 300% of its inverse (opposite) movement. Investors should be aware that the successful attainment of these precise daily objectives is not guaranteed.

TMF (Direxion Daily 20+ Year Treasury Bull 3X ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $1.90B, a beta of 7.22 versus the broader market, a 52-week range of 25.39-44.24, average daily share volume of 4.5M, a public-listing history dating back to 2009. These structural characteristics shape how TMF etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 7.22 indicates TMF has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. TMF pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on TMF?

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.

TMF snapshot

As of September 30, 2026, spot at $25.54, ATM IV 49.80%, IV rank 100.00%, expected move 14.28%. The covered call on TMF below is built from the September 30, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 30-day expiry.

Why this covered call structure on TMF specifically: TMF IV at 49.80% is rich versus its 1-year range, which favors premium-selling structures like a TMF covered call, with a market-implied 1-standard-deviation move of approximately 14.28% (roughly $3.65 on the underlying). The 30-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TMF expiries trade a higher absolute premium for lower per-day decay. Position sizing on TMF should anchor to the underlying notional of $25.54 per share and to the trader's directional view on TMF etf.

TMF covered call setup

The TMF covered call below is built from the September 30, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With TMF at $25.54 on that close, the first option leg uses a $27.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TMF chain at a 30-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 TMF shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$25.54	long
Sell 1	Call	$27.00	$0.87

TMF covered call risk and reward

Net Premium / Debit: -$2,467.00
Max Profit (per contract): $233.00
Max Loss (per contract): -$2,466.00
Breakeven(s): $24.67
Risk / Reward Ratio: 0.094

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.

TMF covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on TMF. 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%	-$2,466.00
$5.66	-77.9%	-$1,901.41
$11.30	-55.7%	-$1,336.81
$16.95	-33.6%	-$772.22
$22.59	-11.5%	-$207.63
$28.24	+10.6%	+$233.00
$33.89	+32.7%	+$233.00
$39.53	+54.8%	+$233.00
$45.18	+76.9%	+$233.00
$50.82	+99.0%	+$233.00

When traders use covered call on TMF

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

TMF thesis for this covered call

The market-implied 1-standard-deviation range for TMF extends from approximately $21.89 on the downside to $29.19 on the upside. A TMF covered call collects premium on an existing long TMF position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether TMF will breach that level within the expiration window. Current TMF 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 TMF at 49.80%. As a Financial Services name, TMF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TMF-specific events.

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

Frequently asked questions

What is a covered call on TMF?: A covered call on TMF is the covered call strategy applied to TMF (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 TMF etf at $25.54 on the September 30, 2026 close, the strikes shown on this page are snapped to the nearest listed TMF chain strike and the premiums come straight from that session's bid/ask midpoint.
How are TMF 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 TMF covered call priced from the September 30, 2026 end-of-day chain at a 30-day expiry (ATM IV 49.80%), the computed maximum profit is $233.00 per contract and the computed maximum loss is -$2,466.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a TMF covered call?: The breakeven for the TMF covered call priced on this page is roughly $24.67 at expiration, derived from the September 30, 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 TMF market-implied 1-standard-deviation expected move in the same options snapshot is approximately 14.28%; 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 TMF?: Covered calls on TMF are an income strategy run on existing TMF 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 TMF implied volatility affect this covered call?: TMF ATM IV is at 49.80% 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.