UGA Covered Call Strategy
UGA (United States Gasoline Fund LP), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund invests in futures contracts for gasoline, other types of gasoline, crude oil, diesel-heating oil, natural gas and other petroleum-based fuels. The Benchmark Futures Contract is the futures contract on gasoline as traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration.
UGA (United States Gasoline Fund LP) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $114.9M, a beta of 1.68 versus the broader market, a 52-week range of 57.63-124.6, average daily share volume of 85K, a public-listing history dating back to 2008. These structural characteristics shape how UGA etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.68 indicates UGA 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 UGA?
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 UGA snapshot
As of May 15, 2026, spot at $122.76, ATM IV 61.70%, IV rank 45.85%, expected move 17.69%. The covered call on UGA 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 UGA specifically: UGA IV at 61.70% is mid-range versus its 1-year history, so the credit collected on a UGA covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 17.69% (roughly $21.71 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 UGA expiries trade a higher absolute premium for lower per-day decay. Position sizing on UGA should anchor to the underlying notional of $122.76 per share and to the trader's directional view on UGA etf.
UGA covered call setup
The UGA 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 UGA near $122.76, the first option leg uses a $129.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UGA 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 UGA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $122.76 | long |
| Sell 1 | Call | $129.00 | $6.25 |
UGA covered call risk and reward
- Net Premium / Debit
- -$11,651.00
- Max Profit (per contract)
- $1,249.00
- Max Loss (per contract)
- -$11,650.00
- Breakeven(s)
- $116.51
- Risk / Reward Ratio
- 0.107
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.
UGA covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UGA. 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% | -$11,650.00 |
| $27.15 | -77.9% | -$8,935.82 |
| $54.29 | -55.8% | -$6,221.64 |
| $81.44 | -33.7% | -$3,507.46 |
| $108.58 | -11.6% | -$793.28 |
| $135.72 | +10.6% | +$1,249.00 |
| $162.86 | +32.7% | +$1,249.00 |
| $190.00 | +54.8% | +$1,249.00 |
| $217.14 | +76.9% | +$1,249.00 |
| $244.29 | +99.0% | +$1,249.00 |
When traders use covered call on UGA
Covered calls on UGA are an income strategy run on existing UGA etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UGA thesis for this covered call
The market-implied 1-standard-deviation range for UGA extends from approximately $101.05 on the downside to $144.47 on the upside. A UGA covered call collects premium on an existing long UGA position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UGA will breach that level within the expiration window. Current UGA IV rank near 45.85% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on UGA should anchor more to the directional view and the expected-move geometry. As a Financial Services name, UGA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UGA-specific events.
UGA 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. UGA positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UGA alongside the broader basket even when UGA-specific fundamentals are unchanged. Short-premium structures like a covered call on UGA carry tail risk when realized volatility exceeds the implied move; review historical UGA earnings reactions and macro stress periods before sizing. Always rebuild the position from current UGA chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UGA?
- A covered call on UGA is the covered call strategy applied to UGA (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 UGA etf trading near $122.76, the strikes shown on this page are snapped to the nearest listed UGA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UGA 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 UGA covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 61.70%), the computed maximum profit is $1,249.00 per contract and the computed maximum loss is -$11,650.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UGA covered call?
- The breakeven for the UGA covered call priced on this page is roughly $116.51 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 UGA market-implied 1-standard-deviation expected move is approximately 17.69%; 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 UGA?
- Covered calls on UGA are an income strategy run on existing UGA 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 UGA implied volatility affect this covered call?
- UGA ATM IV is at 61.70% with IV rank near 45.85%, 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.