USCI Covered Call Strategy
USCI (United States Commodity Index Fund), in the Financial Services sector, (Asset Management industry), listed on AMEX.
The fund seeks to achieve its investment objective by investing to the fullest extent possible in the Benchmark Component Futures Contracts. The SDCI is designed to reflect the performance of a diversified group of commodities.
USCI (United States Commodity Index Fund) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $378.4M, a beta of 0.88 versus the broader market, a 52-week range of 69.3-102.93, average daily share volume of 25K, a public-listing history dating back to 2010. These structural characteristics shape how USCI etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.88 places USCI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a covered call on USCI?
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 USCI snapshot
As of May 15, 2026, spot at $101.13, ATM IV 31.90%, IV rank 27.95%, expected move 9.15%. The covered call on USCI 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 USCI specifically: USCI IV at 31.90% is on the cheap side of its 1-year range, which means a premium-selling USCI covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 9.15% (roughly $9.25 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 USCI expiries trade a higher absolute premium for lower per-day decay. Position sizing on USCI should anchor to the underlying notional of $101.13 per share and to the trader's directional view on USCI etf.
USCI covered call setup
The USCI 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 USCI near $101.13, the first option leg uses a $106.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed USCI 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 USCI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $101.13 | long |
| Sell 1 | Call | $106.00 | $2.20 |
USCI covered call risk and reward
- Net Premium / Debit
- -$9,893.00
- Max Profit (per contract)
- $707.00
- Max Loss (per contract)
- -$9,892.00
- Breakeven(s)
- $98.93
- Risk / Reward Ratio
- 0.071
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.
USCI covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on USCI. 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% | -$9,892.00 |
| $22.37 | -77.9% | -$7,656.07 |
| $44.73 | -55.8% | -$5,420.14 |
| $67.09 | -33.7% | -$3,184.21 |
| $89.45 | -11.6% | -$948.28 |
| $111.81 | +10.6% | +$707.00 |
| $134.17 | +32.7% | +$707.00 |
| $156.53 | +54.8% | +$707.00 |
| $178.88 | +76.9% | +$707.00 |
| $201.24 | +99.0% | +$707.00 |
When traders use covered call on USCI
Covered calls on USCI are an income strategy run on existing USCI etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
USCI thesis for this covered call
The market-implied 1-standard-deviation range for USCI extends from approximately $91.88 on the downside to $110.38 on the upside. A USCI covered call collects premium on an existing long USCI position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether USCI will breach that level within the expiration window. Current USCI IV rank near 27.95% 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 USCI at 31.90%. As a Financial Services name, USCI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to USCI-specific events.
USCI 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. USCI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move USCI alongside the broader basket even when USCI-specific fundamentals are unchanged. Short-premium structures like a covered call on USCI carry tail risk when realized volatility exceeds the implied move; review historical USCI earnings reactions and macro stress periods before sizing. Always rebuild the position from current USCI chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on USCI?
- A covered call on USCI is the covered call strategy applied to USCI (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 USCI etf trading near $101.13, the strikes shown on this page are snapped to the nearest listed USCI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are USCI 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 USCI covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 31.90%), the computed maximum profit is $707.00 per contract and the computed maximum loss is -$9,892.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a USCI covered call?
- The breakeven for the USCI covered call priced on this page is roughly $98.93 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 USCI market-implied 1-standard-deviation expected move is approximately 9.15%; 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 USCI?
- Covered calls on USCI are an income strategy run on existing USCI 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 USCI implied volatility affect this covered call?
- USCI ATM IV is at 31.90% with IV rank near 27.95%, 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.