UBT Covered Call Strategy
UBT (ProShares - Ultra 20+ Year Treasury), in the Financial Services sector, (Asset Management - Leveraged industry), listed on AMEX.
This investment product's daily objective is to achieve results that, prior to the deduction of fees and expenses, match two times (2x) the daily performance observed in the ICE U.S. Treasury 20+ Year Bond Index.
UBT (ProShares - Ultra 20+ Year Treasury) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $62.8M, a beta of 4.76 versus the broader market, a 52-week range of 15-18.48, average daily share volume of 73K, a public-listing history dating back to 2010. These structural characteristics shape how UBT etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 4.76 indicates UBT has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. UBT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on UBT?
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 UBT snapshot
As of June 30, 2026, spot at $16.36, ATM IV 291.80%, IV rank 59.43%, expected move 83.66%. The covered call on UBT 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 UBT specifically: UBT IV at 291.80% is mid-range versus its 1-year history, so the credit collected on a UBT covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 83.66% (roughly $13.69 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 UBT expiries trade a higher absolute premium for lower per-day decay. Position sizing on UBT should anchor to the underlying notional of $16.36 per share and to the trader's directional view on UBT etf.
UBT covered call setup
The UBT 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 UBT near $16.36, the first option leg uses a $17.18 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UBT 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 UBT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $16.36 | long |
| Sell 1 | Call | $17.18 | N/A |
UBT covered call risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
UBT covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UBT. 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.
When traders use covered call on UBT
Covered calls on UBT are an income strategy run on existing UBT etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UBT thesis for this covered call
The market-implied 1-standard-deviation range for UBT extends from approximately $2.67 on the downside to $30.05 on the upside. A UBT covered call collects premium on an existing long UBT position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UBT will breach that level within the expiration window. Current UBT IV rank near 59.43% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on UBT should anchor more to the directional view and the expected-move geometry. As a Financial Services name, UBT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UBT-specific events.
UBT 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. UBT positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UBT alongside the broader basket even when UBT-specific fundamentals are unchanged. Short-premium structures like a covered call on UBT carry tail risk when realized volatility exceeds the implied move; review historical UBT earnings reactions and macro stress periods before sizing. Always rebuild the position from current UBT chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UBT?
- A covered call on UBT is the covered call strategy applied to UBT (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 UBT etf trading near $16.36, the strikes shown on this page are snapped to the nearest listed UBT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UBT 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 UBT covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 291.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UBT covered call?
- The breakeven for the UBT covered call priced on this page is no defined breakeven on the modeled curve 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 UBT market-implied 1-standard-deviation expected move is approximately 83.66%; 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 UBT?
- Covered calls on UBT are an income strategy run on existing UBT 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 UBT implied volatility affect this covered call?
- UBT ATM IV is at 291.80% with IV rank near 59.43%, 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.