ABG Covered Call Strategy
ABG (Asbury Automotive Group, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NYSE.
Asbury Automotive Group, Inc., together with its subsidiaries, operates as an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance services, replacement parts, and collision repair services. The company also provides finance and insurance products, including arranging vehicle financing through third parties; and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation, prepaid maintenance, and credit life and disability insurance. As of December 31, 2021, the company owned and operated 205 new vehicle franchises representing 31 brands of automobiles at 155 dealership locations; and 35 collision centers in the United States. Asbury Automotive Group, Inc. was founded in 1996 and is headquartered in Duluth, Georgia.
ABG (Asbury Automotive Group, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $3.59B, a trailing P/E of 8.98, a beta of 0.78 versus the broader market, a 52-week range of 184.61-274.5, average daily share volume of 258K, a public-listing history dating back to 2002, approximately 15K full-time employees. These structural characteristics shape how ABG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.78 places ABG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 8.98 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price.
What is a covered call on ABG?
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 ABG snapshot
As of May 15, 2026, spot at $181.06, ATM IV 35.30%, IV rank 31.49%, expected move 10.12%. The covered call on ABG 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 ABG specifically: ABG IV at 35.30% is mid-range versus its 1-year history, so the credit collected on a ABG covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 10.12% (roughly $18.32 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 ABG expiries trade a higher absolute premium for lower per-day decay. Position sizing on ABG should anchor to the underlying notional of $181.06 per share and to the trader's directional view on ABG stock.
ABG covered call setup
The ABG 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 ABG near $181.06, the first option leg uses a $190.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ABG 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 ABG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $181.06 | long |
| Sell 1 | Call | $190.00 | $4.45 |
ABG covered call risk and reward
- Net Premium / Debit
- -$17,661.00
- Max Profit (per contract)
- $1,339.00
- Max Loss (per contract)
- -$17,660.00
- Breakeven(s)
- $176.61
- Risk / Reward Ratio
- 0.076
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.
ABG covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on ABG. 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% | -$17,660.00 |
| $40.04 | -77.9% | -$13,656.77 |
| $80.07 | -55.8% | -$9,653.55 |
| $120.11 | -33.7% | -$5,650.32 |
| $160.14 | -11.6% | -$1,647.10 |
| $200.17 | +10.6% | +$1,339.00 |
| $240.20 | +32.7% | +$1,339.00 |
| $280.24 | +54.8% | +$1,339.00 |
| $320.27 | +76.9% | +$1,339.00 |
| $360.30 | +99.0% | +$1,339.00 |
When traders use covered call on ABG
Covered calls on ABG are an income strategy run on existing ABG stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
ABG thesis for this covered call
The market-implied 1-standard-deviation range for ABG extends from approximately $162.74 on the downside to $199.38 on the upside. A ABG covered call collects premium on an existing long ABG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether ABG will breach that level within the expiration window. Current ABG IV rank near 31.49% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on ABG should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, ABG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ABG-specific events.
ABG 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. ABG positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ABG alongside the broader basket even when ABG-specific fundamentals are unchanged. Short-premium structures like a covered call on ABG carry tail risk when realized volatility exceeds the implied move; review historical ABG earnings reactions and macro stress periods before sizing. Always rebuild the position from current ABG chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on ABG?
- A covered call on ABG is the covered call strategy applied to ABG (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 ABG stock trading near $181.06, the strikes shown on this page are snapped to the nearest listed ABG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ABG 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 ABG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 35.30%), the computed maximum profit is $1,339.00 per contract and the computed maximum loss is -$17,660.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ABG covered call?
- The breakeven for the ABG covered call priced on this page is roughly $176.61 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 ABG market-implied 1-standard-deviation expected move is approximately 10.12%; 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 ABG?
- Covered calls on ABG are an income strategy run on existing ABG 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 ABG implied volatility affect this covered call?
- ABG ATM IV is at 35.30% with IV rank near 31.49%, 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.