UYG Covered Call Strategy
UYG (ProShares - Ultra Financials), in the Financial Services sector, (Asset Management industry), listed on AMEX.
ProShares Ultra Financials seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the S&P Financial Select SectorSM Index.
UYG (ProShares - Ultra Financials) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $708.2M, a beta of 1.76 versus the broader market, a 52-week range of 68.44-104.32, average daily share volume of 15K, a public-listing history dating back to 2007. These structural characteristics shape how UYG etf options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.76 indicates UYG has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. UYG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on UYG?
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 UYG snapshot
As of May 15, 2026, spot at $78.03, ATM IV 35.40%, IV rank 41.08%, expected move 10.15%. The covered call on UYG 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 UYG specifically: UYG IV at 35.40% is mid-range versus its 1-year history, so the credit collected on a UYG covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 10.15% (roughly $7.92 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 UYG expiries trade a higher absolute premium for lower per-day decay. Position sizing on UYG should anchor to the underlying notional of $78.03 per share and to the trader's directional view on UYG etf.
UYG covered call setup
The UYG 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 UYG near $78.03, the first option leg uses a $82.17 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UYG 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 UYG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $78.03 | long |
| Sell 1 | Call | $82.17 | $1.88 |
UYG covered call risk and reward
- Net Premium / Debit
- -$7,615.50
- Max Profit (per contract)
- $601.50
- Max Loss (per contract)
- -$7,614.50
- Breakeven(s)
- $76.16
- Risk / Reward Ratio
- 0.079
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.
UYG covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UYG. 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% | -$7,614.50 |
| $17.26 | -77.9% | -$5,889.32 |
| $34.51 | -55.8% | -$4,164.15 |
| $51.77 | -33.7% | -$2,438.97 |
| $69.02 | -11.6% | -$713.80 |
| $86.27 | +10.6% | +$601.50 |
| $103.52 | +32.7% | +$601.50 |
| $120.77 | +54.8% | +$601.50 |
| $138.02 | +76.9% | +$601.50 |
| $155.28 | +99.0% | +$601.50 |
When traders use covered call on UYG
Covered calls on UYG are an income strategy run on existing UYG etf positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UYG thesis for this covered call
The market-implied 1-standard-deviation range for UYG extends from approximately $70.11 on the downside to $85.95 on the upside. A UYG covered call collects premium on an existing long UYG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UYG will breach that level within the expiration window. Current UYG IV rank near 41.08% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on UYG should anchor more to the directional view and the expected-move geometry. As a Financial Services name, UYG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UYG-specific events.
UYG 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. UYG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UYG alongside the broader basket even when UYG-specific fundamentals are unchanged. Short-premium structures like a covered call on UYG carry tail risk when realized volatility exceeds the implied move; review historical UYG earnings reactions and macro stress periods before sizing. Always rebuild the position from current UYG chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UYG?
- A covered call on UYG is the covered call strategy applied to UYG (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 UYG etf trading near $78.03, the strikes shown on this page are snapped to the nearest listed UYG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UYG 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 UYG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 35.40%), the computed maximum profit is $601.50 per contract and the computed maximum loss is -$7,614.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UYG covered call?
- The breakeven for the UYG covered call priced on this page is roughly $76.16 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 UYG market-implied 1-standard-deviation expected move is approximately 10.15%; 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 UYG?
- Covered calls on UYG are an income strategy run on existing UYG 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 UYG implied volatility affect this covered call?
- UYG ATM IV is at 35.40% with IV rank near 41.08%, 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.