AXTI Covered Call Strategy
AXTI (AXT, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. It produces semiconductor substrates using its proprietary vertical gradient freeze technology. The company offers indium phosphide for use in data center connectivity using light/lasers, 5G communications, fiber optic lasers and detectors, passive optical networks, silicon photonics, photonic integrated circuits, terrestrial solar cells, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LED, screen displays, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts.
AXTI (AXT, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $5.65B, a beta of 1.76 versus the broader market, a 52-week range of 1.38-134, average daily share volume of 12.4M, a public-listing history dating back to 1998, approximately 2K full-time employees. These structural characteristics shape how AXTI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.76 indicates AXTI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a covered call on AXTI?
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 AXTI snapshot
As of May 15, 2026, spot at $125.59, ATM IV 145.70%, IV rank 56.74%, expected move 41.77%. The covered call on AXTI 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 28-day expiry.
Why this covered call structure on AXTI specifically: AXTI IV at 145.70% is mid-range versus its 1-year history, so the credit collected on a AXTI covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 41.77% (roughly $52.46 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated AXTI expiries trade a higher absolute premium for lower per-day decay. Position sizing on AXTI should anchor to the underlying notional of $125.59 per share and to the trader's directional view on AXTI stock.
AXTI covered call setup
The AXTI 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 AXTI near $125.59, the first option leg uses a $132.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed AXTI chain at a 28-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 AXTI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $125.59 | long |
| Sell 1 | Call | $132.00 | $18.00 |
AXTI covered call risk and reward
- Net Premium / Debit
- -$10,759.00
- Max Profit (per contract)
- $2,441.00
- Max Loss (per contract)
- -$10,758.00
- Breakeven(s)
- $107.59
- Risk / Reward Ratio
- 0.227
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.
AXTI covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on AXTI. 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% | -$10,758.00 |
| $27.78 | -77.9% | -$7,981.25 |
| $55.55 | -55.8% | -$5,204.49 |
| $83.31 | -33.7% | -$2,427.74 |
| $111.08 | -11.6% | +$349.02 |
| $138.85 | +10.6% | +$2,441.00 |
| $166.62 | +32.7% | +$2,441.00 |
| $194.38 | +54.8% | +$2,441.00 |
| $222.15 | +76.9% | +$2,441.00 |
| $249.92 | +99.0% | +$2,441.00 |
When traders use covered call on AXTI
Covered calls on AXTI are an income strategy run on existing AXTI stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
AXTI thesis for this covered call
The market-implied 1-standard-deviation range for AXTI extends from approximately $73.13 on the downside to $178.05 on the upside. A AXTI covered call collects premium on an existing long AXTI position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether AXTI will breach that level within the expiration window. Current AXTI IV rank near 56.74% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on AXTI should anchor more to the directional view and the expected-move geometry. As a Technology name, AXTI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to AXTI-specific events.
AXTI 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. AXTI positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move AXTI alongside the broader basket even when AXTI-specific fundamentals are unchanged. Short-premium structures like a covered call on AXTI carry tail risk when realized volatility exceeds the implied move; review historical AXTI earnings reactions and macro stress periods before sizing. Always rebuild the position from current AXTI chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on AXTI?
- A covered call on AXTI is the covered call strategy applied to AXTI (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 AXTI stock trading near $125.59, the strikes shown on this page are snapped to the nearest listed AXTI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are AXTI 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 AXTI covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 145.70%), the computed maximum profit is $2,441.00 per contract and the computed maximum loss is -$10,758.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a AXTI covered call?
- The breakeven for the AXTI covered call priced on this page is roughly $107.59 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 AXTI market-implied 1-standard-deviation expected move is approximately 41.77%; 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 AXTI?
- Covered calls on AXTI are an income strategy run on existing AXTI 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 AXTI implied volatility affect this covered call?
- AXTI ATM IV is at 145.70% with IV rank near 56.74%, 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.