How are TMV 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 TMV covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 25.90%), the computed maximum profit is $231.00 per contract and the computed maximum loss is -$3,668.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a TMV covered call?

The breakeven for the TMV covered call priced on this page is roughly $36.69 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 TMV market-implied 1-standard-deviation expected move is approximately 7.43%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TMV implied volatility affect this covered call?

TMV ATM IV is at 25.90% with IV rank near 10.38%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.

TMV Covered Call Strategy

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

TMV provides daily inverse (-3x) exposure to the ICE U.S. Treasury 20+ Year Bond Index. Using a combination of swaps and futures, TMV gives investors -3x exposure to daily moves in T-bonds with more than 20 years left to maturity. The daily reset means investors shouldn't expect the leverage factor to hold constant over investment horizons greater than one day. In short, the fund is a valid option for tactical positioning/hedging against rising interest rates, but it's important to keep in mind that the -3x leverage results in greater impact from the effects of compounding. As a levered product, TMV is not a buy-and-hold ETF, it's a short-term tactical instrument.

TMV (Direxion Daily 20+ Year Treasury Bear 3X ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $158.0M, a beta of -6.90 versus the broader market, a 52-week range of 31.82-42.54, average daily share volume of 674K, a public-listing history dating back to 2009. These structural characteristics shape how TMV etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -6.90 indicates TMV has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. TMV pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on TMV?

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 TMV snapshot

As of June 30, 2026, spot at $36.89, ATM IV 25.90%, IV rank 10.38%, expected move 7.43%. The covered call on TMV 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 17-day expiry.

Why this covered call structure on TMV specifically: TMV IV at 25.90% is on the cheap side of its 1-year range, which means a premium-selling TMV covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 7.43% (roughly $2.74 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 TMV expiries trade a higher absolute premium for lower per-day decay. Position sizing on TMV should anchor to the underlying notional of $36.89 per share and to the trader's directional view on TMV etf.

TMV covered call setup

The TMV 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 TMV near $36.89, the first option leg uses a $39.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TMV 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 TMV shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$36.89	long
Sell 1	Call	$39.00	$0.20

TMV covered call risk and reward

Net Premium / Debit: -$3,669.00
Max Profit (per contract): $231.00
Max Loss (per contract): -$3,668.00
Breakeven(s): $36.69
Risk / Reward Ratio: 0.063

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.

TMV covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on TMV. 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%	-$3,668.00
$8.17	-77.9%	-$2,852.45
$16.32	-55.8%	-$2,036.90
$24.48	-33.7%	-$1,221.36
$32.63	-11.5%	-$405.81
$40.79	+10.6%	+$231.00
$48.94	+32.7%	+$231.00
$57.10	+54.8%	+$231.00
$65.25	+76.9%	+$231.00
$73.41	+99.0%	+$231.00

When traders use covered call on TMV

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

TMV thesis for this covered call

The market-implied 1-standard-deviation range for TMV extends from approximately $34.15 on the downside to $39.63 on the upside. A TMV covered call collects premium on an existing long TMV position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether TMV will breach that level within the expiration window. Current TMV IV rank near 10.38% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on TMV at 25.90%. As a Financial Services name, TMV options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TMV-specific events.

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

Frequently asked questions

What is a covered call on TMV?: A covered call on TMV is the covered call strategy applied to TMV (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 TMV etf trading near $36.89, the strikes shown on this page are snapped to the nearest listed TMV chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are TMV 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 TMV covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 25.90%), the computed maximum profit is $231.00 per contract and the computed maximum loss is -$3,668.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a TMV covered call?: The breakeven for the TMV covered call priced on this page is roughly $36.69 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 TMV market-implied 1-standard-deviation expected move is approximately 7.43%; 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 TMV?: Covered calls on TMV are an income strategy run on existing TMV 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 TMV implied volatility affect this covered call?: TMV ATM IV is at 25.90% with IV rank near 10.38%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.