ADAM Covered Call Strategy
ADAM (Adamas Trust, Inc.), in the Real Estate sector, (REIT - Mortgage industry), listed on NASDAQ.
Adamas Trust, Inc. acquires, invests in, finances, and manages mortgage-related single-family and multi-family residential assets in the United States. The company's targeted residential loans, including business purpose loans; agency RMBS; non-agency residential mortgage-backed securities (RMBS); structured multi-family property investments, such as preferred equity in, and mezzanine loans to owners of multi-family properties; and other mortgage-, residential housing- and credit-related assets and strategic investments; and commercial mortgage-backed securities (CMBS). It also owns and manages single-family rental properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Adamas Trust, Inc. was formerly known as New York Mortgage Trust, Inc. and changed its name to Adamas Trust, Inc. in September 2025.
ADAM (Adamas Trust, Inc.) trades in the Real Estate sector, specifically REIT - Mortgage, with a market capitalization of approximately $803.4M, a trailing P/E of 5.19, a beta of 1.26 versus the broader market, a 52-week range of 6.16-9.32, average daily share volume of 767K, a public-listing history dating back to 2025, approximately 70 full-time employees. These structural characteristics shape how ADAM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.26 places ADAM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 5.19 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. ADAM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on ADAM?
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 ADAM snapshot
As of May 15, 2026, spot at $8.73, ATM IV 38.80%, IV rank 6.16%, expected move 11.12%. The covered call on ADAM 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 ADAM specifically: ADAM IV at 38.80% is on the cheap side of its 1-year range, which means a premium-selling ADAM covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 11.12% (roughly $0.97 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 ADAM expiries trade a higher absolute premium for lower per-day decay. Position sizing on ADAM should anchor to the underlying notional of $8.73 per share and to the trader's directional view on ADAM stock.
ADAM covered call setup
The ADAM 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 ADAM near $8.73, the first option leg uses a $9.17 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ADAM 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 ADAM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $8.73 | long |
| Sell 1 | Call | $9.17 | N/A |
ADAM covered call risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
ADAM covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on ADAM. 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.
When traders use covered call on ADAM
Covered calls on ADAM are an income strategy run on existing ADAM stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
ADAM thesis for this covered call
The market-implied 1-standard-deviation range for ADAM extends from approximately $7.76 on the downside to $9.70 on the upside. A ADAM covered call collects premium on an existing long ADAM position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether ADAM will breach that level within the expiration window. Current ADAM IV rank near 6.16% 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 ADAM at 38.80%. As a Real Estate name, ADAM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ADAM-specific events.
ADAM 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. ADAM positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ADAM alongside the broader basket even when ADAM-specific fundamentals are unchanged. Short-premium structures like a covered call on ADAM carry tail risk when realized volatility exceeds the implied move; review historical ADAM earnings reactions and macro stress periods before sizing. Always rebuild the position from current ADAM chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on ADAM?
- A covered call on ADAM is the covered call strategy applied to ADAM (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 ADAM stock trading near $8.73, the strikes shown on this page are snapped to the nearest listed ADAM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ADAM 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 ADAM covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 38.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ADAM covered call?
- The breakeven for the ADAM covered call priced on this page is no defined breakeven on the modeled curve 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 ADAM market-implied 1-standard-deviation expected move is approximately 11.12%; 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 ADAM?
- Covered calls on ADAM are an income strategy run on existing ADAM 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 ADAM implied volatility affect this covered call?
- ADAM ATM IV is at 38.80% with IV rank near 6.16%, 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.