How are AVXL 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 AVXL covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 37.30%), the computed maximum profit is $35.50 per contract and the computed maximum loss is -$263.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a AVXL covered call?

The breakeven for the AVXL covered call priced on this page is roughly $2.65 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 AVXL market-implied 1-standard-deviation expected move is approximately 10.69%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current AVXL implied volatility affect this covered call?

AVXL ATM IV is at 37.30% with IV rank near 6.56%, 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.

AVXL Covered Call Strategy

AVXL (Anavex Life Sciences Corp.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Anavex Life Sciences Corp., a clinical stage biopharmaceutical company, engages in the development of drug candidates for the treatment of central nervous system (CNS) diseases. Its lead drug candidate is ANAVEX 2-73, which is in Phase III clinical trial for the treatment of Alzheimer's disease; Phase III clinical trial to treat pediatric patients with Rett syndrome; Phase II clinical trial for the treatment of Parkinson's disease; and preclinical clinical trials to treat epilepsy, infantile spasms, Fragile X syndrome, Angelman syndrome, multiple sclerosis, and tuberous sclerosis complex. The company's drug candidate also comprises ANAVEX 3-71, which is in Phase I clinical trial for the treatment of frontotemporal dementia and other dementia indications; and preclinical clinical trials for the treatment of neurodegenerative diseases, such as Alzheimer's and Parkinson's diseases. Its preclinical drug candidates include ANAVEX 1-41, a sigma-1 receptor agonist for the treatment of depression, stroke, Parkinson's, and Alzheimer's diseases; ANAVEX 1066, a mixed sigma-1/sigma-2 ligand for the potential treatment of neuropathic and visceral pain; and ANAVEX 1037 to treat prostate and pancreatic cancer. The company was incorporated in 2004 and is headquartered in New York, New York.

AVXL (Anavex Life Sciences Corp.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $285.4M, a beta of 1.25 versus the broader market, a 52-week range of 2.61-13.99, average daily share volume of 1.3M, a public-listing history dating back to 2006, approximately 42 full-time employees. These structural characteristics shape how AVXL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.25 places AVXL roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.

What is a covered call on AVXL?

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 AVXL snapshot

As of May 15, 2026, spot at $2.92, ATM IV 37.30%, IV rank 6.56%, expected move 10.69%. The covered call on AVXL 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 AVXL specifically: AVXL IV at 37.30% is on the cheap side of its 1-year range, which means a premium-selling AVXL covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 10.69% (roughly $0.31 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 AVXL expiries trade a higher absolute premium for lower per-day decay. Position sizing on AVXL should anchor to the underlying notional of $2.92 per share and to the trader's directional view on AVXL stock.

AVXL covered call setup

The AVXL 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 AVXL near $2.92, the first option leg uses a $3.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AVXL 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 AVXL shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$2.92	long
Sell 1	Call	$3.00	$0.28

AVXL covered call risk and reward

Net Premium / Debit: -$264.50
Max Profit (per contract): $35.50
Max Loss (per contract): -$263.50
Breakeven(s): $2.65
Risk / Reward Ratio: 0.135

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.

AVXL covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on AVXL. 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	-99.7%	-$263.50
$0.65	-77.6%	-$199.05
$1.30	-55.5%	-$134.60
$1.94	-33.4%	-$70.14
$2.59	-11.4%	-$5.69
$3.23	+10.7%	+$35.50
$3.88	+32.8%	+$35.50
$4.52	+54.9%	+$35.50
$5.17	+76.9%	+$35.50
$5.81	+99.0%	+$35.50

When traders use covered call on AVXL

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

AVXL thesis for this covered call

The market-implied 1-standard-deviation range for AVXL extends from approximately $2.61 on the downside to $3.23 on the upside. A AVXL covered call collects premium on an existing long AVXL position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether AVXL will breach that level within the expiration window. Current AVXL IV rank near 6.56% 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 AVXL at 37.30%. As a Healthcare name, AVXL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AVXL-specific events.

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

Frequently asked questions

What is a covered call on AVXL?: A covered call on AVXL is the covered call strategy applied to AVXL (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 AVXL stock trading near $2.92, the strikes shown on this page are snapped to the nearest listed AVXL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are AVXL 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 AVXL covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 37.30%), the computed maximum profit is $35.50 per contract and the computed maximum loss is -$263.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a AVXL covered call?: The breakeven for the AVXL covered call priced on this page is roughly $2.65 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 AVXL market-implied 1-standard-deviation expected move is approximately 10.69%; 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 AVXL?: Covered calls on AVXL are an income strategy run on existing AVXL 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 AVXL implied volatility affect this covered call?: AVXL ATM IV is at 37.30% with IV rank near 6.56%, 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.