How are ALSN 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 ALSN covered call priced from the November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV 33.50%), the computed maximum profit is $1,061.50 per contract and the computed maximum loss is -$12,437.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ALSN covered call?

The breakeven for the ALSN covered call priced on this page is roughly $124.38 at expiration, derived from the November 13, 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 ALSN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.60%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ALSN implied volatility affect this covered call?

ALSN ATM IV is at 33.50% with IV rank near 34.86%, 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.

ALSN Covered Call Strategy

ALSN (Allison Transmission Holdings, Inc.), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NYSE.

Allison Transmission Holdings, Inc. (ALSN), along with its affiliates, specializes in the global development, manufacturing, and sale of fully-automatic transmissions. These robust systems are engineered for both medium and heavy-duty commercial vehicles, as well as medium and heavy-tactical defense vehicles utilized by the U.S. military. The company's diverse product portfolio serves a broad spectrum of applications. This includes on-highway vehicles such as trucks for distribution, refuse collection, construction, fire, and emergency services, alongside school and transit buses, and recreational motor homes. Furthermore, Allison transmissions power off-highway equipment for the energy, mining, and construction industries, as well as both wheeled and tracked defense vehicles. New transmissions are marketed under the well-known Allison Transmission brand, while their remanufactured offerings are sold as ReTran.

ALSN (Allison Transmission Holdings, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $10.41B, a trailing P/E of 18.04, a beta of 1.06 versus the broader market, a 52-week range of 78.77-137.62, average daily share volume of 797K, a public-listing history dating back to 2012, approximately 4K full-time employees. These structural characteristics shape how ALSN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.06 places ALSN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ALSN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on ALSN?

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.

ALSN snapshot

As of November 13, 2026, spot at $126.36, ATM IV 33.50%, IV rank 34.86%, expected move 9.60%. The covered call on ALSN below is built from the November 13, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.

Why this covered call structure on ALSN specifically: ALSN IV at 33.50% is mid-range versus its 1-year history, so the credit collected on a ALSN covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 9.60% (roughly $12.14 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ALSN expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALSN should anchor to the underlying notional of $126.36 per share and to the trader's directional view on ALSN stock.

ALSN covered call setup

The ALSN covered call below is built from the November 13, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With ALSN at $126.36 on that close, the first option leg uses a $135.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALSN chain at a 35-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 ALSN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$126.36	long
Sell 1	Call	$135.00	$1.98

ALSN covered call risk and reward

Net Premium / Debit: -$12,438.50
Max Profit (per contract): $1,061.50
Max Loss (per contract): -$12,437.50
Breakeven(s): $124.38
Risk / Reward Ratio: 0.085

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.

ALSN covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on ALSN. 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%	-$12,437.50
$27.95	-77.9%	-$9,643.72
$55.89	-55.8%	-$6,849.94
$83.82	-33.7%	-$4,056.16
$111.76	-11.6%	-$1,262.38
$139.70	+10.6%	+$1,061.50
$167.64	+32.7%	+$1,061.50
$195.57	+54.8%	+$1,061.50
$223.51	+76.9%	+$1,061.50
$251.45	+99.0%	+$1,061.50

When traders use covered call on ALSN

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

ALSN thesis for this covered call

The market-implied 1-standard-deviation range for ALSN extends from approximately $114.22 on the downside to $138.50 on the upside. A ALSN covered call collects premium on an existing long ALSN position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether ALSN will breach that level within the expiration window. Current ALSN IV rank near 34.86% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on ALSN should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, ALSN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALSN-specific events.

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

Frequently asked questions

What is a covered call on ALSN?: A covered call on ALSN is the covered call strategy applied to ALSN (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 ALSN stock at $126.36 on the November 13, 2026 close, the strikes shown on this page are snapped to the nearest listed ALSN chain strike and the premiums come straight from that session's bid/ask midpoint.
How are ALSN 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 ALSN covered call priced from the November 13, 2026 end-of-day chain at a 30-day expiry (ATM IV 33.50%), the computed maximum profit is $1,061.50 per contract and the computed maximum loss is -$12,437.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ALSN covered call?: The breakeven for the ALSN covered call priced on this page is roughly $124.38 at expiration, derived from the November 13, 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 ALSN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.60%; 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 ALSN?: Covered calls on ALSN are an income strategy run on existing ALSN 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 ALSN implied volatility affect this covered call?: ALSN ATM IV is at 33.50% with IV rank near 34.86%, 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.