How are CHDN 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 CHDN covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 31.90%), the computed maximum profit is $631.50 per contract and the computed maximum loss is -$8,867.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CHDN covered call?

The breakeven for the CHDN covered call priced on this page is roughly $88.69 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 CHDN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.15%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CHDN implied volatility affect this covered call?

CHDN ATM IV is at 31.90% with IV rank near 11.07%, 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.

CHDN Covered Call Strategy

CHDN (Churchill Downs Incorporated), in the Consumer Cyclical sector, (Gambling, Resorts & Casinos industry), listed on NASDAQ.

Churchill Downs Incorporated (CDI) is a leading U.S. entertainment enterprise focused on horse racing, online wagering, and general gaming activities. Its extensive operations are categorized into three main divisions: Live and Historical Racing, TwinSpires, and Gaming. As of December 31, 2021, CDI's portfolio included three pari-mutuel gaming venues in Kentucky, collectively featuring approximately 3,050 historical racing machines. The company also operates TwinSpires, a comprehensive digital platform offering betting on horse races, sports, and iGaming. Furthermore, CDI manages nine brick-and-mortar sportsbooks and runs casino gaming across eight states, housing around 11,000 slot machines and video lottery terminals, in addition to 200 table games. Beyond these core ventures, Churchill Downs Incorporated delivers streaming video of live horse races and replays, along with a wide array of racing and handicapping information.

CHDN (Churchill Downs Incorporated) trades in the Consumer Cyclical sector, specifically Gambling, Resorts & Casinos, with a market capitalization of approximately $6.17B, a trailing P/E of 15.13, a beta of 0.67 versus the broader market, a 52-week range of 79.4-118.35, average daily share volume of 1.0M, a public-listing history dating back to 1993, approximately 8K full-time employees. These structural characteristics shape how CHDN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.67 indicates CHDN has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. CHDN pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on CHDN?

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.

CHDN snapshot

As of August 14, 2026, spot at $90.71, ATM IV 31.90%, IV rank 11.07%, expected move 9.15%. The covered call on CHDN 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 35-day expiry.

Why this covered call structure on CHDN specifically: CHDN IV at 31.90% is on the cheap side of its 1-year range, which means a premium-selling CHDN covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 9.15% (roughly $8.30 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CHDN expiries trade a higher absolute premium for lower per-day decay. Position sizing on CHDN should anchor to the underlying notional of $90.71 per share and to the trader's directional view on CHDN stock.

CHDN covered call setup

The CHDN 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 CHDN at $90.71 on that close, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CHDN chain at a 35-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 CHDN shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$90.71	long
Sell 1	Call	$95.00	$2.03

CHDN covered call risk and reward

Net Premium / Debit: -$8,868.50
Max Profit (per contract): $631.50
Max Loss (per contract): -$8,867.50
Breakeven(s): $88.69
Risk / Reward Ratio: 0.071

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.

CHDN covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on CHDN. 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%	-$8,867.50
$20.07	-77.9%	-$6,861.96
$40.12	-55.8%	-$4,856.42
$60.18	-33.7%	-$2,850.89
$80.23	-11.6%	-$845.35
$100.29	+10.6%	+$631.50
$120.34	+32.7%	+$631.50
$140.40	+54.8%	+$631.50
$160.45	+76.9%	+$631.50
$180.51	+99.0%	+$631.50

When traders use covered call on CHDN

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

CHDN thesis for this covered call

The market-implied 1-standard-deviation range for CHDN extends from approximately $82.41 on the downside to $99.01 on the upside. A CHDN covered call collects premium on an existing long CHDN position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CHDN will breach that level within the expiration window. Current CHDN IV rank near 11.07% 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 CHDN at 31.90%. As a Consumer Cyclical name, CHDN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CHDN-specific events.

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

Frequently asked questions

What is a covered call on CHDN?: A covered call on CHDN is the covered call strategy applied to CHDN (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 CHDN stock at $90.71 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed CHDN chain strike and the premiums come straight from that session's bid/ask midpoint.
How are CHDN 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 CHDN covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 31.90%), the computed maximum profit is $631.50 per contract and the computed maximum loss is -$8,867.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CHDN covered call?: The breakeven for the CHDN covered call priced on this page is roughly $88.69 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 CHDN market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.15%; 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 CHDN?: Covered calls on CHDN are an income strategy run on existing CHDN 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 CHDN implied volatility affect this covered call?: CHDN ATM IV is at 31.90% with IV rank near 11.07%, 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.