UVXY Covered Call Strategy
UVXY (ProShares - Ultra VIX Short-Term Futures ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on CBOE.
ProShares Ultra VIX Short-Term Futures ETF seeks daily investment results, before fees and expenses, that correspond to one and one-half times (1.5x) the daily performance of the S&P 500 VIX Short-Term Futures Index.
UVXY (ProShares - Ultra VIX Short-Term Futures ETF) trades in the Financial Services sector, specifically Asset Management - Leveraged, with a market capitalization of approximately $219.4M, a beta of -3.31 versus the broader market, a 52-week range of 33.95-131, average daily share volume of 8.1M, a public-listing history dating back to 2011. These structural characteristics shape how UVXY etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -3.31 indicates UVXY has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.
What is a covered call on UVXY?
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 UVXY snapshot
As of May 15, 2026, spot at $35.89, ATM IV 85.55%, IV rank 13.10%, expected move 24.53%. The covered call on UVXY 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 28-day expiry.
Why this covered call structure on UVXY specifically: UVXY IV at 85.55% is on the cheap side of its 1-year range, which means a premium-selling UVXY covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 24.53% (roughly $8.80 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated UVXY expiries trade a higher absolute premium for lower per-day decay. Position sizing on UVXY should anchor to the underlying notional of $35.89 per share and to the trader's directional view on UVXY etf.
UVXY covered call setup
The UVXY 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 UVXY near $35.89, the first option leg uses a $37.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UVXY chain at a 28-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 UVXY shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $35.89 | long |
| Sell 1 | Call | $37.50 | $2.84 |
UVXY covered call risk and reward
- Net Premium / Debit
- -$3,305.00
- Max Profit (per contract)
- $445.00
- Max Loss (per contract)
- -$3,304.00
- Breakeven(s)
- $33.05
- Risk / Reward Ratio
- 0.135
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.
UVXY covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UVXY. 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% | -$3,304.00 |
| $7.94 | -77.9% | -$2,510.56 |
| $15.88 | -55.8% | -$1,717.13 |
| $23.81 | -33.6% | -$923.69 |
| $31.75 | -11.5% | -$130.25 |
| $39.68 | +10.6% | +$445.00 |
| $47.62 | +32.7% | +$445.00 |
| $55.55 | +54.8% | +$445.00 |
| $63.48 | +76.9% | +$445.00 |
| $71.42 | +99.0% | +$445.00 |
When traders use covered call on UVXY
Covered calls on UVXY are an income strategy run on existing UVXY etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UVXY thesis for this covered call
The market-implied 1-standard-deviation range for UVXY extends from approximately $27.09 on the downside to $44.69 on the upside. A UVXY covered call collects premium on an existing long UVXY position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UVXY will breach that level within the expiration window. Current UVXY IV rank near 13.10% 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 UVXY at 85.55%. As a Financial Services name, UVXY options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UVXY-specific events.
UVXY 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. UVXY positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UVXY alongside the broader basket even when UVXY-specific fundamentals are unchanged. Short-premium structures like a covered call on UVXY carry tail risk when realized volatility exceeds the implied move; review historical UVXY earnings reactions and macro stress periods before sizing. Always rebuild the position from current UVXY chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UVXY?
- A covered call on UVXY is the covered call strategy applied to UVXY (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 UVXY etf trading near $35.89, the strikes shown on this page are snapped to the nearest listed UVXY chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UVXY 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 UVXY covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 85.55%), the computed maximum profit is $445.00 per contract and the computed maximum loss is -$3,304.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UVXY covered call?
- The breakeven for the UVXY covered call priced on this page is roughly $33.05 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 UVXY market-implied 1-standard-deviation expected move is approximately 24.53%; 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 UVXY?
- Covered calls on UVXY are an income strategy run on existing UVXY 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 UVXY implied volatility affect this covered call?
- UVXY ATM IV is at 85.55% with IV rank near 13.10%, 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.