TSMU Covered Call Strategy
TSMU (GraniteShares 2x Long TSM Daily ETF), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
The Fund seeks daily investment results, before fees and expenses, of 2 times (200%) the daily percentage change of the common stock of Taiwan Semiconductor Manufacturing Co Ltd, (NASDAQ: TSM) There is no guarantee that the Fund will meet its stated objective. The fund should not be expected to provide 2 times the cumulative return of TSM for periods greater than a day.
TSMU (GraniteShares 2x Long TSM Daily ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $43.8M, a beta of 3.81 versus the broader market, a 52-week range of 19.64-75.459, average daily share volume of 101K, a public-listing history dating back to 2024. These structural characteristics shape how TSMU etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.81 indicates TSMU has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a covered call on TSMU?
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 TSMU snapshot
As of May 15, 2026, spot at $69.77, ATM IV 87.40%, IV rank 34.53%, expected move 25.06%. The covered call on TSMU 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 34-day expiry.
Why this covered call structure on TSMU specifically: TSMU IV at 87.40% is mid-range versus its 1-year history, so the credit collected on a TSMU covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 25.06% (roughly $17.48 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated TSMU expiries trade a higher absolute premium for lower per-day decay. Position sizing on TSMU should anchor to the underlying notional of $69.77 per share and to the trader's directional view on TSMU etf.
TSMU covered call setup
The TSMU 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 TSMU near $69.77, the first option leg uses a $75.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TSMU chain at a 34-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 TSMU shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $69.77 | long |
| Sell 1 | Call | $75.00 | $5.75 |
TSMU covered call risk and reward
- Net Premium / Debit
- -$6,402.00
- Max Profit (per contract)
- $1,098.00
- Max Loss (per contract)
- -$6,401.00
- Breakeven(s)
- $64.02
- Risk / Reward Ratio
- 0.172
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.
TSMU covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on TSMU. 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% | -$6,401.00 |
| $15.44 | -77.9% | -$4,858.46 |
| $30.86 | -55.8% | -$3,315.91 |
| $46.29 | -33.7% | -$1,773.37 |
| $61.71 | -11.5% | -$230.83 |
| $77.14 | +10.6% | +$1,098.00 |
| $92.56 | +32.7% | +$1,098.00 |
| $107.99 | +54.8% | +$1,098.00 |
| $123.41 | +76.9% | +$1,098.00 |
| $138.84 | +99.0% | +$1,098.00 |
When traders use covered call on TSMU
Covered calls on TSMU are an income strategy run on existing TSMU etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
TSMU thesis for this covered call
The market-implied 1-standard-deviation range for TSMU extends from approximately $52.29 on the downside to $87.25 on the upside. A TSMU covered call collects premium on an existing long TSMU position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether TSMU will breach that level within the expiration window. Current TSMU IV rank near 34.53% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on TSMU should anchor more to the directional view and the expected-move geometry. As a Financial Services name, TSMU options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TSMU-specific events.
TSMU 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. TSMU positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TSMU alongside the broader basket even when TSMU-specific fundamentals are unchanged. Short-premium structures like a covered call on TSMU carry tail risk when realized volatility exceeds the implied move; review historical TSMU earnings reactions and macro stress periods before sizing. Always rebuild the position from current TSMU chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on TSMU?
- A covered call on TSMU is the covered call strategy applied to TSMU (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 TSMU etf trading near $69.77, the strikes shown on this page are snapped to the nearest listed TSMU chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TSMU 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 TSMU covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 87.40%), the computed maximum profit is $1,098.00 per contract and the computed maximum loss is -$6,401.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TSMU covered call?
- The breakeven for the TSMU covered call priced on this page is roughly $64.02 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 TSMU market-implied 1-standard-deviation expected move is approximately 25.06%; 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 TSMU?
- Covered calls on TSMU are an income strategy run on existing TSMU 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 TSMU implied volatility affect this covered call?
- TSMU ATM IV is at 87.40% with IV rank near 34.53%, 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.