AX Covered Call Strategy
AX (Axos Financial, Inc.), in the Financial Services sector, (Banks - Regional industry), listed on NYSE.
Founded in Las Vegas, Nevada, in 1999, Axos Financial, Inc. is a U.S.-based financial institution that delivers a comprehensive array of banking services to both individual consumers and businesses. The company operates through two primary divisions: its core Banking Business and its Securities Business. For deposits, Axos provides a broad spectrum of options including checking, savings, demand, money market, and time deposit accounts, alongside specialized products such as zero balance and insured cash sweep accounts. Its diverse lending portfolio encompasses various mortgage types, such as single-family, multi-family, and commercial real estate-backed loans. They also extend commercial and industrial loans, comprising non-real estate, asset-backed, term loans, and lines of credit. Consumer lending encompasses automobile loans, fixed-rate unsecured loans, and unique offerings such as structured settlements, Small Business Administration (SBA) loans, and securities-backed financing.
AX (Axos Financial, Inc.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $5.47B, a trailing P/E of 11.44, a beta of 1.25 versus the broader market, a 52-week range of 74.89-101.92, average daily share volume of 412K, a public-listing history dating back to 2005, approximately 2K full-time employees. These structural characteristics shape how AX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.25 places AX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 11.44 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 AX?
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 AX snapshot
As of June 30, 2026, spot at $97.55, ATM IV 29.50%, IV rank 11.37%, expected move 8.46%. The covered call on AX 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 17-day expiry.
Why this covered call structure on AX specifically: AX IV at 29.50% is on the cheap side of its 1-year range, which means a premium-selling AX covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 8.46% (roughly $8.25 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AX expiries trade a higher absolute premium for lower per-day decay. Position sizing on AX should anchor to the underlying notional of $97.55 per share and to the trader's directional view on AX stock.
AX covered call setup
The AX 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 AX near $97.55, the first option leg uses a $100.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AX chain at a 17-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 AX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $97.55 | long |
| Sell 1 | Call | $100.00 | $1.35 |
AX covered call risk and reward
- Net Premium / Debit
- -$9,620.00
- Max Profit (per contract)
- $380.00
- Max Loss (per contract)
- -$9,619.00
- Breakeven(s)
- $96.20
- Risk / Reward Ratio
- 0.040
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.
AX covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on AX. 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% | -$9,619.00 |
| $21.58 | -77.9% | -$7,462.23 |
| $43.15 | -55.8% | -$5,305.45 |
| $64.71 | -33.7% | -$3,148.68 |
| $86.28 | -11.6% | -$991.90 |
| $107.85 | +10.6% | +$380.00 |
| $129.42 | +32.7% | +$380.00 |
| $150.98 | +54.8% | +$380.00 |
| $172.55 | +76.9% | +$380.00 |
| $194.12 | +99.0% | +$380.00 |
When traders use covered call on AX
Covered calls on AX are an income strategy run on existing AX stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
AX thesis for this covered call
The market-implied 1-standard-deviation range for AX extends from approximately $89.30 on the downside to $105.80 on the upside. A AX covered call collects premium on an existing long AX position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether AX will breach that level within the expiration window. Current AX IV rank near 11.37% 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 AX at 29.50%. As a Financial Services name, AX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AX-specific events.
AX 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. AX positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AX alongside the broader basket even when AX-specific fundamentals are unchanged. Short-premium structures like a covered call on AX carry tail risk when realized volatility exceeds the implied move; review historical AX earnings reactions and macro stress periods before sizing. Always rebuild the position from current AX chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on AX?
- A covered call on AX is the covered call strategy applied to AX (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 AX stock trading near $97.55, the strikes shown on this page are snapped to the nearest listed AX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AX 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 AX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 29.50%), the computed maximum profit is $380.00 per contract and the computed maximum loss is -$9,619.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AX covered call?
- The breakeven for the AX covered call priced on this page is roughly $96.20 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 AX market-implied 1-standard-deviation expected move is approximately 8.46%; 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 AX?
- Covered calls on AX are an income strategy run on existing AX 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 AX implied volatility affect this covered call?
- AX ATM IV is at 29.50% with IV rank near 11.37%, 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.