CDNA Covered Call Strategy
CDNA (CareDx, Inc), in the Healthcare sector, (Medical - Diagnostics & Research industry), listed on NASDAQ.
CareDx, Inc. discovers, develops, and commercializes diagnostic solutions for transplant patients and caregivers worldwide. It provides AlloSure Kidney, a donor-derived cell-free DNA (dd-cfDNA) solution for kidney transplant patients; AlloMap Heart, a gene expression solution for heart transplant patients; AlloSure Heart, a dd-cfDNA solution for heart transplant patients; and AlloSure Lung, a dd-cfDNA solution for lung transplant patients. The company also offers TruSight HLA, a next generation sequencing (NGS) based high resolution typing solution; Olerup SSP, which is used to type human leukocyte antigen (HLA) alleles based on sequence specific primer technology; QTYPE that enables precision in HLA typing; and Ottr, a transplant patient management software. In addition, it provides AlloSeq Tx, a high-resolution HLA typing solution; AlloSeq cfDNA, a surveillance solution to measure dd-cfDNA in blood; AlloSeq HCT, a solution for chimerism testing for stem cell transplant recipients; and XynQAPI transplant quality tracking and waitlist management solutions, as well as AlloCare, a mobile app that offers a patient-centric resource for transplant recipients. The company offers its products directly to customers, as well as through third-party distributors and sub-distributors. It has a license agreement with Illumina, Inc. for the distribution, development, and commercialization of NGS products and technologies; and Cibiltech SAS to commercialize iBox, a software for the predictive analysis of post-transplantation kidney allograft loss.
CDNA (CareDx, Inc) trades in the Healthcare sector, specifically Medical - Diagnostics & Research, with a market capitalization of approximately $1.06B, a beta of 2.49 versus the broader market, a 52-week range of 10.96-23.24, average daily share volume of 692K, a public-listing history dating back to 2014, approximately 644 full-time employees. These structural characteristics shape how CDNA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.49 indicates CDNA 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 CDNA?
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 CDNA snapshot
As of May 15, 2026, spot at $19.97, ATM IV 85.80%, IV rank 21.94%, expected move 24.60%. The covered call on CDNA 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 34-day expiry.
Why this covered call structure on CDNA specifically: CDNA IV at 85.80% is on the cheap side of its 1-year range, which means a premium-selling CDNA covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 24.60% (roughly $4.91 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CDNA expiries trade a higher absolute premium for lower per-day decay. Position sizing on CDNA should anchor to the underlying notional of $19.97 per share and to the trader's directional view on CDNA stock.
CDNA covered call setup
The CDNA 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 CDNA near $19.97, the first option leg uses a $20.97 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CDNA chain at a 34-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 CDNA shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $19.97 | long |
| Sell 1 | Call | $20.97 | N/A |
CDNA covered call risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
CDNA covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on CDNA. 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.
When traders use covered call on CDNA
Covered calls on CDNA are an income strategy run on existing CDNA stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
CDNA thesis for this covered call
The market-implied 1-standard-deviation range for CDNA extends from approximately $15.06 on the downside to $24.88 on the upside. A CDNA covered call collects premium on an existing long CDNA position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CDNA will breach that level within the expiration window. Current CDNA IV rank near 21.94% 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 CDNA at 85.80%. As a Healthcare name, CDNA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CDNA-specific events.
CDNA 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. CDNA positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CDNA alongside the broader basket even when CDNA-specific fundamentals are unchanged. Short-premium structures like a covered call on CDNA carry tail risk when realized volatility exceeds the implied move; review historical CDNA earnings reactions and macro stress periods before sizing. Always rebuild the position from current CDNA chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on CDNA?
- A covered call on CDNA is the covered call strategy applied to CDNA (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 CDNA stock trading near $19.97, the strikes shown on this page are snapped to the nearest listed CDNA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CDNA 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 CDNA covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 85.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CDNA covered call?
- The breakeven for the CDNA covered call priced on this page is no defined breakeven on the modeled curve 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 CDNA market-implied 1-standard-deviation expected move is approximately 24.60%; 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 CDNA?
- Covered calls on CDNA are an income strategy run on existing CDNA 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 CDNA implied volatility affect this covered call?
- CDNA ATM IV is at 85.80% with IV rank near 21.94%, 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.