How are CAG 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 CAG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 37.31%), the computed maximum profit is $89.00 per contract and the computed maximum loss is -$1,310.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CAG covered call?

The breakeven for the CAG covered call priced on this page is roughly $13.11 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 CAG market-implied 1-standard-deviation expected move is approximately 10.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CAG implied volatility affect this covered call?

CAG ATM IV is at 37.31% with IV rank near 67.57%, 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.

CAG Covered Call Strategy

CAG (Conagra Brands, Inc.), in the Consumer Defensive sector, (Packaged Foods industry), listed on NYSE.

Conagra Brands, Inc., together with its subsidiaries, operates as a consumer packaged goods food company in North America. The company operates in four segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice. The Grocery & Snacks segment primarily offers shelf stable food products through various retail channels in the United States. The Refrigerated & Frozen segment provides temperature-controlled food products through various retail channels in the United States. The International segment offers food products in various temperature states through retail and foodservice channels outside of the United States. The Foodservice segment offers branded and customized food products, including meals, entrees, sauces, and various custom-manufactured culinary products packaged for restaurants and other foodservice establishments in the United States.

CAG (Conagra Brands, Inc.) trades in the Consumer Defensive sector, specifically Packaged Foods, with a market capitalization of approximately $6.74B, a beta of -0.03 versus the broader market, a 52-week range of 13.61-23.37, average daily share volume of 14.9M, a public-listing history dating back to 1980, approximately 19K full-time employees. These structural characteristics shape how CAG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -0.03 indicates CAG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. CAG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on CAG?

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 CAG snapshot

As of May 15, 2026, spot at $13.46, ATM IV 37.31%, IV rank 67.57%, expected move 10.70%. The covered call on CAG 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 CAG specifically: CAG IV at 37.31% is mid-range versus its 1-year history, so the credit collected on a CAG covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 10.70% (roughly $1.44 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 CAG expiries trade a higher absolute premium for lower per-day decay. Position sizing on CAG should anchor to the underlying notional of $13.46 per share and to the trader's directional view on CAG stock.

CAG covered call setup

The CAG 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 CAG near $13.46, the first option leg uses a $14.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CAG 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 CAG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$13.46	long
Sell 1	Call	$14.00	$0.35

CAG covered call risk and reward

Net Premium / Debit: -$1,311.00
Max Profit (per contract): $89.00
Max Loss (per contract): -$1,310.00
Breakeven(s): $13.11
Risk / Reward Ratio: 0.068

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.

CAG covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on CAG. 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	-99.9%	-$1,310.00
$2.98	-77.8%	-$1,012.50
$5.96	-55.7%	-$715.01
$8.93	-33.6%	-$417.51
$11.91	-11.5%	-$120.01
$14.88	+10.6%	+$89.00
$17.86	+32.7%	+$89.00
$20.83	+54.8%	+$89.00
$23.81	+76.9%	+$89.00
$26.78	+99.0%	+$89.00

When traders use covered call on CAG

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

CAG thesis for this covered call

The market-implied 1-standard-deviation range for CAG extends from approximately $12.02 on the downside to $14.90 on the upside. A CAG covered call collects premium on an existing long CAG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CAG will breach that level within the expiration window. Current CAG IV rank near 67.57% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on CAG should anchor more to the directional view and the expected-move geometry. As a Consumer Defensive name, CAG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CAG-specific events.

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

Frequently asked questions

What is a covered call on CAG?: A covered call on CAG is the covered call strategy applied to CAG (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 CAG stock trading near $13.46, the strikes shown on this page are snapped to the nearest listed CAG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CAG 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 CAG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 37.31%), the computed maximum profit is $89.00 per contract and the computed maximum loss is -$1,310.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CAG covered call?: The breakeven for the CAG covered call priced on this page is roughly $13.11 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 CAG market-implied 1-standard-deviation expected move is approximately 10.70%; 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 CAG?: Covered calls on CAG are an income strategy run on existing CAG 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 CAG implied volatility affect this covered call?: CAG ATM IV is at 37.31% with IV rank near 67.57%, 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.