TMFC Covered Call Strategy
TMFC (Motley Fool 100 Index ETF), in the Financial Services sector, (Asset Management industry), listed on CBOE.
Under normal circumstances, at least 80% of the fund's total assets (exclusive of any collateral held from securities lending) will be invested in the component securities of the index. The index was established by TMF in 2017 and is a proprietary, rules-based index designed to track the performance of the 100 largest, most liquid U.S. companies that have been recommended by TMF’s analysts and newsletters. The fund is non-diversified.
TMFC (Motley Fool 100 Index ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $2.01B, a beta of 1.10 versus the broader market, a 52-week range of 59.5-77.575, average daily share volume of 102K, a public-listing history dating back to 2018. These structural characteristics shape how TMFC etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.10 places TMFC roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. TMFC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on TMFC?
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 TMFC snapshot
As of May 15, 2026, spot at $77.30, ATM IV 22.30%, IV rank 35.53%, expected move 6.39%. The covered call on TMFC 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 154-day expiry.
Why this covered call structure on TMFC specifically: TMFC IV at 22.30% is mid-range versus its 1-year history, so the credit collected on a TMFC covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 6.39% (roughly $4.94 on the underlying). The 154-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TMFC expiries trade a higher absolute premium for lower per-day decay. Position sizing on TMFC should anchor to the underlying notional of $77.30 per share and to the trader's directional view on TMFC etf.
TMFC covered call setup
The TMFC 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 TMFC near $77.30, the first option leg uses a $81.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TMFC chain at a 154-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 TMFC shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $77.30 | long |
| Sell 1 | Call | $81.00 | $3.50 |
TMFC covered call risk and reward
- Net Premium / Debit
- -$7,380.00
- Max Profit (per contract)
- $720.00
- Max Loss (per contract)
- -$7,379.00
- Breakeven(s)
- $73.80
- Risk / Reward Ratio
- 0.098
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.
TMFC covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on TMFC. 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% | -$7,379.00 |
| $17.10 | -77.9% | -$5,669.96 |
| $34.19 | -55.8% | -$3,960.93 |
| $51.28 | -33.7% | -$2,251.89 |
| $68.37 | -11.6% | -$542.86 |
| $85.46 | +10.6% | +$720.00 |
| $102.55 | +32.7% | +$720.00 |
| $119.64 | +54.8% | +$720.00 |
| $136.73 | +76.9% | +$720.00 |
| $153.82 | +99.0% | +$720.00 |
When traders use covered call on TMFC
Covered calls on TMFC are an income strategy run on existing TMFC etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
TMFC thesis for this covered call
The market-implied 1-standard-deviation range for TMFC extends from approximately $72.36 on the downside to $82.24 on the upside. A TMFC covered call collects premium on an existing long TMFC position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether TMFC will breach that level within the expiration window. Current TMFC IV rank near 35.53% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on TMFC should anchor more to the directional view and the expected-move geometry. As a Financial Services name, TMFC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TMFC-specific events.
TMFC 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. TMFC positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TMFC alongside the broader basket even when TMFC-specific fundamentals are unchanged. Short-premium structures like a covered call on TMFC carry tail risk when realized volatility exceeds the implied move; review historical TMFC earnings reactions and macro stress periods before sizing. Always rebuild the position from current TMFC chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on TMFC?
- A covered call on TMFC is the covered call strategy applied to TMFC (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 TMFC etf trading near $77.30, the strikes shown on this page are snapped to the nearest listed TMFC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TMFC 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 TMFC covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 22.30%), the computed maximum profit is $720.00 per contract and the computed maximum loss is -$7,379.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TMFC covered call?
- The breakeven for the TMFC covered call priced on this page is roughly $73.80 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 TMFC market-implied 1-standard-deviation expected move is approximately 6.39%; 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 TMFC?
- Covered calls on TMFC are an income strategy run on existing TMFC 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 TMFC implied volatility affect this covered call?
- TMFC ATM IV is at 22.30% with IV rank near 35.53%, 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.