UBOT Covered Call Strategy
UBOT (Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF seeks daily investment results, before fees and expenses, of 200% of the performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index. There is no guarantee the fund will achieve its stated investment objective.
UBOT (Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $52.3M, a beta of 3.17 versus the broader market, a 52-week range of 18.76-32.08, average daily share volume of 22K, a public-listing history dating back to 2018. These structural characteristics shape how UBOT etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 3.17 indicates UBOT has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. UBOT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on UBOT?
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 UBOT snapshot
As of May 15, 2026, spot at $29.97, ATM IV 56.10%, IV rank 7.26%, expected move 16.08%. The covered call on UBOT 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 UBOT specifically: UBOT IV at 56.10% is on the cheap side of its 1-year range, which means a premium-selling UBOT covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 16.08% (roughly $4.82 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 UBOT expiries trade a higher absolute premium for lower per-day decay. Position sizing on UBOT should anchor to the underlying notional of $29.97 per share and to the trader's directional view on UBOT etf.
UBOT covered call setup
The UBOT 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 UBOT near $29.97, the first option leg uses a $31.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UBOT 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 UBOT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $29.97 | long |
| Sell 1 | Call | $31.00 | $1.60 |
UBOT covered call risk and reward
- Net Premium / Debit
- -$2,837.00
- Max Profit (per contract)
- $263.00
- Max Loss (per contract)
- -$2,836.00
- Breakeven(s)
- $28.37
- Risk / Reward Ratio
- 0.093
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.
UBOT covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UBOT. 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% | -$2,836.00 |
| $6.64 | -77.9% | -$2,173.46 |
| $13.26 | -55.8% | -$1,510.91 |
| $19.89 | -33.6% | -$848.37 |
| $26.51 | -11.5% | -$185.83 |
| $33.14 | +10.6% | +$263.00 |
| $39.76 | +32.7% | +$263.00 |
| $46.39 | +54.8% | +$263.00 |
| $53.01 | +76.9% | +$263.00 |
| $59.64 | +99.0% | +$263.00 |
When traders use covered call on UBOT
Covered calls on UBOT are an income strategy run on existing UBOT etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UBOT thesis for this covered call
The market-implied 1-standard-deviation range for UBOT extends from approximately $25.15 on the downside to $34.79 on the upside. A UBOT covered call collects premium on an existing long UBOT position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UBOT will breach that level within the expiration window. Current UBOT IV rank near 7.26% 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 UBOT at 56.10%. As a Financial Services name, UBOT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UBOT-specific events.
UBOT 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. UBOT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UBOT alongside the broader basket even when UBOT-specific fundamentals are unchanged. Short-premium structures like a covered call on UBOT carry tail risk when realized volatility exceeds the implied move; review historical UBOT earnings reactions and macro stress periods before sizing. Always rebuild the position from current UBOT chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UBOT?
- A covered call on UBOT is the covered call strategy applied to UBOT (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 UBOT etf trading near $29.97, the strikes shown on this page are snapped to the nearest listed UBOT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UBOT 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 UBOT covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 56.10%), the computed maximum profit is $263.00 per contract and the computed maximum loss is -$2,836.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UBOT covered call?
- The breakeven for the UBOT covered call priced on this page is roughly $28.37 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 UBOT market-implied 1-standard-deviation expected move is approximately 16.08%; 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 UBOT?
- Covered calls on UBOT are an income strategy run on existing UBOT 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 UBOT implied volatility affect this covered call?
- UBOT ATM IV is at 56.10% with IV rank near 7.26%, 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.