CAH Covered Call Strategy
CAH (Cardinal Health, Inc.), in the Healthcare sector, (Medical - Distribution industry), listed on NYSE.
Cardinal Health, Inc. operates as a global, integrated provider of healthcare services and products, with its reach spanning the United States, Canada, Europe, Asia, and other international markets. The company delivers bespoke support to a diverse clientele, including hospitals, healthcare networks, pharmacies, outpatient surgical centers, clinical labs, physician practices, and individuals receiving care at home. It is structured into two core divisions: Pharmaceutical and Medical. The Pharmaceutical division oversees the distribution of a wide array of products, encompassing branded, generic, and specialty pharmaceuticals, along with over-the-counter health and consumer goods. This segment additionally offers specialized services to pharmaceutical manufacturers and healthcare providers, particularly for specialty pharmaceutical products. Its operations extend to managing nuclear pharmacies and facilities that produce radiopharmaceuticals.
CAH (Cardinal Health, Inc.) trades in the Healthcare sector, specifically Medical - Distribution, with a market capitalization of approximately $55.08B, a trailing P/E of 32.38, a beta of 0.52 versus the broader market, a 52-week range of 145.87-258.3, average daily share volume of 2.2M, a public-listing history dating back to 1983, approximately 59K full-time employees. These structural characteristics shape how CAH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.52 indicates CAH has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. CAH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on CAH?
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.
CAH snapshot
As of August 14, 2026, spot at $234.32, ATM IV 25.47%, IV rank 26.13%, expected move 7.30%. The covered call on CAH below is built from the August 14, 2026 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 CAH specifically: CAH IV at 25.47% is on the cheap side of its 1-year range, which means a premium-selling CAH covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 7.30% (roughly $17.11 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 CAH expiries trade a higher absolute premium for lower per-day decay. Position sizing on CAH should anchor to the underlying notional of $234.32 per share and to the trader's directional view on CAH stock.
CAH covered call setup
The CAH covered call below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With CAH at $234.32 on that close, the first option leg uses a $245.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CAH 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 CAH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $234.32 | long |
| Sell 1 | Call | $245.00 | $2.25 |
CAH covered call risk and reward
- Net Premium / Debit
- -$23,207.00
- Max Profit (per contract)
- $1,293.00
- Max Loss (per contract)
- -$23,206.00
- Breakeven(s)
- $232.07
- Risk / Reward Ratio
- 0.056
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.
CAH covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on CAH. 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% | -$23,206.00 |
| $51.82 | -77.9% | -$18,025.17 |
| $103.63 | -55.8% | -$12,844.33 |
| $155.44 | -33.7% | -$7,663.50 |
| $207.24 | -11.6% | -$2,482.66 |
| $259.05 | +10.6% | +$1,293.00 |
| $310.86 | +32.7% | +$1,293.00 |
| $362.67 | +54.8% | +$1,293.00 |
| $414.48 | +76.9% | +$1,293.00 |
| $466.29 | +99.0% | +$1,293.00 |
When traders use covered call on CAH
Covered calls on CAH are an income strategy run on existing CAH stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
CAH thesis for this covered call
The market-implied 1-standard-deviation range for CAH extends from approximately $217.21 on the downside to $251.43 on the upside. A CAH covered call collects premium on an existing long CAH position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CAH will breach that level within the expiration window. Current CAH IV rank near 26.13% 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 CAH at 25.47%. As a Healthcare name, CAH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CAH-specific events.
CAH 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. CAH positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CAH alongside the broader basket even when CAH-specific fundamentals are unchanged. Short-premium structures like a covered call on CAH carry tail risk when realized volatility exceeds the implied move; review historical CAH earnings reactions and macro stress periods before sizing. Always rebuild the position from current CAH chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on CAH?
- A covered call on CAH is the covered call strategy applied to CAH (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 CAH stock at $234.32 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed CAH chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are CAH 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 CAH covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 25.47%), the computed maximum profit is $1,293.00 per contract and the computed maximum loss is -$23,206.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CAH covered call?
- The breakeven for the CAH covered call priced on this page is roughly $232.07 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The CAH market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.30%; 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 CAH?
- Covered calls on CAH are an income strategy run on existing CAH 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 CAH implied volatility affect this covered call?
- CAH ATM IV is at 25.47% with IV rank near 26.13%, 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.