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 August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 67.50%), the computed maximum profit is $862.00 per contract and the computed maximum loss is -$6,637.00 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 $66.38 at expiration, derived from the August 14, 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 TSMU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 19.35%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current TSMU implied volatility affect this covered call?

TSMU ATM IV is at 67.50% with IV rank near 14.36%, 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.

TSMU Covered Call Strategy

TSMU (GraniteShares 2x Long TSM Daily ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on NASDAQ.

This Fund is engineered to capture daily investment results mirroring 200% (or double) the daily percentage change in the common stock of Taiwan Semiconductor Manufacturing Co Ltd (TSM), exclusive of fees and expenses. However, success in achieving this stated objective cannot be guaranteed. Crucially, the fund is not intended to provide twice the cumulative return of TSM over periods longer than a single trading day.

TSMU (GraniteShares 2x Long TSM Daily ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $31.8M, a beta of 3.57 versus the broader market, a 52-week range of 25.973-93.29, average daily share volume of 100K, 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 3.57 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.

TSMU snapshot

As of August 14, 2026, spot at $70.28, ATM IV 67.50%, IV rank 14.36%, expected move 19.35%. The covered call on TSMU below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this covered call structure on TSMU specifically: TSMU IV at 67.50% is on the cheap side of its 1-year range, which means a premium-selling TSMU covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 19.35% (roughly $13.60 on the underlying). The 35-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 $70.28 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 August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With TSMU at $70.28 on that close, 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 35-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	$70.28	long
Sell 1	Call	$75.00	$3.90

TSMU covered call risk and reward

Net Premium / Debit: -$6,638.00
Max Profit (per contract): $862.00
Max Loss (per contract): -$6,637.00
Breakeven(s): $66.38
Risk / Reward Ratio: 0.130

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.

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%	-$6,637.00
$15.55	-77.9%	-$5,083.18
$31.09	-55.8%	-$3,529.36
$46.62	-33.7%	-$1,975.54
$62.16	-11.5%	-$421.72
$77.70	+10.6%	+$862.00
$93.24	+32.7%	+$862.00
$108.78	+54.8%	+$862.00
$124.32	+76.9%	+$862.00
$139.85	+99.0%	+$862.00

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 $56.68 on the downside to $83.88 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 14.36% 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 TSMU at 67.50%. 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 at $70.28 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed TSMU chain strike and the premiums come straight from that session's 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 August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 67.50%), the computed maximum profit is $862.00 per contract and the computed maximum loss is -$6,637.00 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 $66.38 at expiration, derived from the August 14, 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 TSMU market-implied 1-standard-deviation expected move in the same options snapshot is approximately 19.35%; 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 67.50% with IV rank near 14.36%, 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.