How are CARG 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 CARG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 41.10%), the computed maximum profit is $250.50 per contract and the computed maximum loss is -$3,348.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CARG covered call?

The breakeven for the CARG covered call priced on this page is roughly $33.50 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 CARG market-implied 1-standard-deviation expected move is approximately 11.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CARG implied volatility affect this covered call?

CARG ATM IV is at 41.10% with IV rank near 25.68%, 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.

CARG Covered Call Strategy

CARG (CarGurus, Inc.), in the Consumer Cyclical sector, (Auto - Dealerships industry), listed on NASDAQ.

CarGurus, Inc., established in Boston, Massachusetts, in 2005, manages a prominent online ecosystem for vehicle transactions, serving both buyers and sellers across the United States and internationally. The company's operations are divided into two main segments: the U.S. Marketplace and Digital Wholesale. Essentially, CarGurus offers an expansive digital automotive marketplace where individuals can search for new and pre-owned vehicle listings from numerous dealerships. Simultaneously, it empowers dealers by linking them with a vast, engaged consumer base and supplying them with practical, data-driven market intelligence. The platform provides an array of specialized features to simplify the car buying and selling journey.

CARG (CarGurus, Inc.) trades in the Consumer Cyclical sector, specifically Auto - Dealerships, with a market capitalization of approximately $3.19B, a trailing P/E of 20.84, a beta of 1.21 versus the broader market, a 52-week range of 26.39-39.42, average daily share volume of 1.3M, a public-listing history dating back to 2017, approximately 1K full-time employees. These structural characteristics shape how CARG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.21 places CARG 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 CARG?

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 CARG snapshot

As of June 30, 2026, spot at $33.97, ATM IV 41.10%, IV rank 25.68%, expected move 11.78%. The covered call on CARG 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 CARG specifically: CARG IV at 41.10% is on the cheap side of its 1-year range, which means a premium-selling CARG covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 11.78% (roughly $4.00 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 CARG expiries trade a higher absolute premium for lower per-day decay. Position sizing on CARG should anchor to the underlying notional of $33.97 per share and to the trader's directional view on CARG stock.

CARG covered call setup

The CARG 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 CARG near $33.97, the first option leg uses a $36.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CARG 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 CARG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$33.97	long
Sell 1	Call	$36.00	$0.48

CARG covered call risk and reward

Net Premium / Debit: -$3,349.50
Max Profit (per contract): $250.50
Max Loss (per contract): -$3,348.50
Breakeven(s): $33.50
Risk / Reward Ratio: 0.075

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.

CARG covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on CARG. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$3,348.50
$7.52	-77.9%	-$2,597.52
$15.03	-55.8%	-$1,846.53
$22.54	-33.6%	-$1,095.55
$30.05	-11.5%	-$344.56
$37.56	+10.6%	+$250.50
$45.07	+32.7%	+$250.50
$52.58	+54.8%	+$250.50
$60.09	+76.9%	+$250.50
$67.60	+99.0%	+$250.50

When traders use covered call on CARG

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

CARG thesis for this covered call

The market-implied 1-standard-deviation range for CARG extends from approximately $29.97 on the downside to $37.97 on the upside. A CARG covered call collects premium on an existing long CARG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CARG will breach that level within the expiration window. Current CARG IV rank near 25.68% 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 CARG at 41.10%. As a Consumer Cyclical name, CARG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CARG-specific events.

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

Frequently asked questions

What is a covered call on CARG?: A covered call on CARG is the covered call strategy applied to CARG (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 CARG stock trading near $33.97, the strikes shown on this page are snapped to the nearest listed CARG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CARG 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 CARG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 41.10%), the computed maximum profit is $250.50 per contract and the computed maximum loss is -$3,348.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CARG covered call?: The breakeven for the CARG covered call priced on this page is roughly $33.50 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 CARG market-implied 1-standard-deviation expected move is approximately 11.78%; 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 CARG?: Covered calls on CARG are an income strategy run on existing CARG 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 CARG implied volatility affect this covered call?: CARG ATM IV is at 41.10% with IV rank near 25.68%, 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.