AME Covered Call Strategy
AME (AMETEK, Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices worldwide. It operates in two segments, Electronic Instruments (EIG) and Electromechanical (EMG). The company's EIG segment offers advanced instruments for the process, aerospace, power, and industrial markets; process and analytical instruments for the oil and gas, petrochemical, pharmaceutical, semiconductor, automation, and food and beverage industries; and instruments to the laboratory equipment, ultra-precision manufacturing, medical, and test and measurement markets. This segment also provides power quality monitoring and metering devices, uninterruptible power supplies, programmable power equipment, electromagnetic compatibility test equipment, gas turbines, and environmental health and safety market sensors, dashboard instruments for heavy trucks and other vehicles, and instrumentation and controls for the food and beverage industries; and aircraft and engine sensors, monitoring systems, power supplies, fuel and fluid measurement systems, and data acquisition systems for the aerospace industry. Its EMG segment offers engineered electrical connectors and electronics packaging to protect sensitive devices and mission-critical electronics; precision motion control products for data storage, medical devices, business equipment, automation, and other applications; high-purity powdered metals, strips and foils, specialty clad metals, and metal matrix composites; motor-blower systems and heat exchangers for use in thermal management, military, commercial aircraft, and military ground vehicles; and motors for use in commercial appliances, fitness equipment, food and beverage machines, hydraulic pumps, and industrial blowers. This segment also operates a network of aviation maintenance, repair, and overhaul facilities.
AME (AMETEK, Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $53.04B, a trailing P/E of 34.67, a beta of 1.03 versus the broader market, a 52-week range of 174.43-243.18, average daily share volume of 1.3M, a public-listing history dating back to 1984, approximately 22K full-time employees. These structural characteristics shape how AME stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.03 places AME roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. AME pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on AME?
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 AME snapshot
As of May 15, 2026, spot at $228.22, ATM IV 26.60%, IV rank 46.82%, expected move 7.63%. The covered call on AME 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 AME specifically: AME IV at 26.60% is mid-range versus its 1-year history, so the credit collected on a AME covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 7.63% (roughly $17.40 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 AME expiries trade a higher absolute premium for lower per-day decay. Position sizing on AME should anchor to the underlying notional of $228.22 per share and to the trader's directional view on AME stock.
AME covered call setup
The AME 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 AME near $228.22, the first option leg uses a $240.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AME 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 AME shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $228.22 | long |
| Sell 1 | Call | $240.00 | $3.00 |
AME covered call risk and reward
- Net Premium / Debit
- -$22,522.00
- Max Profit (per contract)
- $1,478.00
- Max Loss (per contract)
- -$22,521.00
- Breakeven(s)
- $225.22
- Risk / Reward Ratio
- 0.066
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.
AME covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on AME. 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% | -$22,521.00 |
| $50.47 | -77.9% | -$17,475.04 |
| $100.93 | -55.8% | -$12,429.08 |
| $151.39 | -33.7% | -$7,383.12 |
| $201.85 | -11.6% | -$2,337.16 |
| $252.31 | +10.6% | +$1,478.00 |
| $302.77 | +32.7% | +$1,478.00 |
| $353.23 | +54.8% | +$1,478.00 |
| $403.69 | +76.9% | +$1,478.00 |
| $454.15 | +99.0% | +$1,478.00 |
When traders use covered call on AME
Covered calls on AME are an income strategy run on existing AME stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
AME thesis for this covered call
The market-implied 1-standard-deviation range for AME extends from approximately $210.82 on the downside to $245.62 on the upside. A AME covered call collects premium on an existing long AME position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether AME will breach that level within the expiration window. Current AME IV rank near 46.82% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on AME should anchor more to the directional view and the expected-move geometry. As a Industrials name, AME options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AME-specific events.
AME 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. AME positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AME alongside the broader basket even when AME-specific fundamentals are unchanged. Short-premium structures like a covered call on AME carry tail risk when realized volatility exceeds the implied move; review historical AME earnings reactions and macro stress periods before sizing. Always rebuild the position from current AME chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on AME?
- A covered call on AME is the covered call strategy applied to AME (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 AME stock trading near $228.22, the strikes shown on this page are snapped to the nearest listed AME chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AME 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 AME covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 26.60%), the computed maximum profit is $1,478.00 per contract and the computed maximum loss is -$22,521.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AME covered call?
- The breakeven for the AME covered call priced on this page is roughly $225.22 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 AME market-implied 1-standard-deviation expected move is approximately 7.63%; 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 AME?
- Covered calls on AME are an income strategy run on existing AME 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 AME implied volatility affect this covered call?
- AME ATM IV is at 26.60% with IV rank near 46.82%, 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.