How are AAOI 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 AAOI covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 110.20%), the computed maximum profit is $2,273.00 per contract and the computed maximum loss is -$13,476.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AAOI covered call?

The breakeven for the AAOI covered call priced on this page is roughly $134.77 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 AAOI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 31.59%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AAOI implied volatility affect this covered call?

AAOI ATM IV is at 110.20% with IV rank near 30.17%, 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.

AAOI Covered Call Strategy

AAOI (Applied Optoelectronics, Inc.), in the Technology sector, (Communication Equipment industry), listed on NASDAQ.

Applied Optoelectronics, Inc. (AAOI) is a global technology firm specializing in the creation, production, and distribution of fiber-optic networking solutions. Its extensive product catalog features optical modules, a range of laser components, subassemblies, transceivers, and complete turn-key systems. The company also supplies critical infrastructure hardware such as headend, node, and distribution equipment. AAOI caters to a varied clientele, including internet data center operators, manufacturers of cable television and telecommunications equipment, and internet service providers, utilizing both direct and partner-based sales channels. Founded in 1997, Applied Optoelectronics, Inc. is headquartered in Sugar Land, Texas.

AAOI (Applied Optoelectronics, Inc.) trades in the Technology sector, specifically Communication Equipment, with a market capitalization of approximately $11.08B, a beta of 3.79 versus the broader market, a 52-week range of 18.5-233.67, average daily share volume of 12.1M, a public-listing history dating back to 2013, approximately 5K full-time employees. These structural characteristics shape how AAOI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 3.79 indicates AAOI 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 AAOI?

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.

AAOI snapshot

As of August 14, 2026, spot at $149.57, ATM IV 110.20%, IV rank 30.17%, expected move 31.59%. The covered call on AAOI 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 AAOI specifically: AAOI IV at 110.20% is mid-range versus its 1-year history, so the credit collected on a AAOI covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 31.59% (roughly $47.25 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 AAOI expiries trade a higher absolute premium for lower per-day decay. Position sizing on AAOI should anchor to the underlying notional of $149.57 per share and to the trader's directional view on AAOI stock.

AAOI covered call setup

The AAOI 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 AAOI at $149.57 on that close, the first option leg uses a $157.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AAOI 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 AAOI shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$149.57	long
Sell 1	Call	$157.50	$14.80

AAOI covered call risk and reward

Net Premium / Debit: -$13,477.00
Max Profit (per contract): $2,273.00
Max Loss (per contract): -$13,476.00
Breakeven(s): $134.77
Risk / Reward Ratio: 0.169

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.

AAOI covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on AAOI. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$13,476.00
$33.08	-77.9%	-$10,169.04
$66.15	-55.8%	-$6,862.07
$99.22	-33.7%	-$3,555.11
$132.29	-11.6%	-$248.14
$165.36	+10.6%	+$2,273.00
$198.43	+32.7%	+$2,273.00
$231.50	+54.8%	+$2,273.00
$264.57	+76.9%	+$2,273.00
$297.64	+99.0%	+$2,273.00

When traders use covered call on AAOI

Covered calls on AAOI are an income strategy run on existing AAOI stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.

AAOI thesis for this covered call

The market-implied 1-standard-deviation range for AAOI extends from approximately $102.32 on the downside to $196.82 on the upside. A AAOI covered call collects premium on an existing long AAOI position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether AAOI will breach that level within the expiration window. Current AAOI IV rank near 30.17% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on AAOI should anchor more to the directional view and the expected-move geometry. As a Technology name, AAOI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AAOI-specific events.

AAOI 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. AAOI positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AAOI alongside the broader basket even when AAOI-specific fundamentals are unchanged. Short-premium structures like a covered call on AAOI carry tail risk when realized volatility exceeds the implied move; review historical AAOI earnings reactions and macro stress periods before sizing. Always rebuild the position from current AAOI chain quotes before placing a trade.

Frequently asked questions

What is a covered call on AAOI?: A covered call on AAOI is the covered call strategy applied to AAOI (stock). 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 AAOI stock at $149.57 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed AAOI chain strike and the premiums come straight from that session's bid/ask midpoint.
How are AAOI 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 AAOI covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 110.20%), the computed maximum profit is $2,273.00 per contract and the computed maximum loss is -$13,476.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AAOI covered call?: The breakeven for the AAOI covered call priced on this page is roughly $134.77 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 AAOI market-implied 1-standard-deviation expected move in the same options snapshot is approximately 31.59%; 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 AAOI?: Covered calls on AAOI are an income strategy run on existing AAOI stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
How does current AAOI implied volatility affect this covered call?: AAOI ATM IV is at 110.20% with IV rank near 30.17%, 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.