UVXY Covered Call Strategy
UVXY (ProShares - Ultra VIX Short-Term Futures ETF), in the Financial Services sector, (Asset Management - Leveraged industry), listed on CBOE.
The ProShares Ultra VIX Short-Term Futures ETF aims to deliver daily investment outcomes, prior to the deduction of fees and expenses, that are one-and-a-half times (1.5x) the daily movement displayed by 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 $121.5M, a beta of -3.30 versus the broader market, a 52-week range of 20.205-70.6, average daily share volume of 7.7M, 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 -3.30 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.
UVXY snapshot
As of August 14, 2026, spot at $20.09, ATM IV 71.17%, IV rank 0.36%, expected move 20.40%. The covered call on UVXY below is built from the August 14, 2026 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 71.17% 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 20.40% (roughly $4.10 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 $20.09 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 August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With UVXY at $20.09 on that close, the first option leg uses a $21.00 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 | $20.09 | long |
| Sell 1 | Call | $21.00 | $1.33 |
UVXY covered call risk and reward
- Net Premium / Debit
- -$1,876.50
- Max Profit (per contract)
- $223.50
- Max Loss (per contract)
- -$1,875.50
- Breakeven(s)
- $18.77
- Risk / Reward Ratio
- 0.119
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% | -$1,875.50 |
| $4.45 | -77.8% | -$1,431.41 |
| $8.89 | -55.7% | -$987.32 |
| $13.33 | -33.6% | -$543.23 |
| $17.77 | -11.5% | -$99.14 |
| $22.21 | +10.6% | +$223.50 |
| $26.66 | +32.7% | +$223.50 |
| $31.10 | +54.8% | +$223.50 |
| $35.54 | +76.9% | +$223.50 |
| $39.98 | +99.0% | +$223.50 |
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 $15.99 on the downside to $24.19 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 0.36% 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 71.17%. 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 at $20.09 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed UVXY chain strike and the premiums come straight from that session's 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 August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 71.17%), the computed maximum profit is $223.50 per contract and the computed maximum loss is -$1,875.50 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 $18.77 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The UVXY market-implied 1-standard-deviation expected move in the same options snapshot is approximately 20.40%; 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 71.17% with IV rank near 0.36%, 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.