CL Covered Call Strategy
CL (Colgate-Palmolive Company), in the Consumer Defensive sector, (Household & Personal Products industry), listed on NYSE.
Colgate-Palmolive Company, together with its subsidiaries, manufactures and sells consumer products worldwide. The company operates through two segments, Oral, Personal and Home Care; and Pet Nutrition. The Oral, Personal and Home Care segment offers toothpaste, toothbrushes, mouthwash, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants, skin health products, dishwashing detergents, fabric conditioners, household cleaners, and other related items. This segment markets and sells its products under various brands, which include Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom's of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, Lady Speed Stick, Speed Stick, EltaMD, Filorga, PCA SKIN, Ajax, Axion, Fabuloso, Murphy, Suavitel, Soupline, and Cuddly to a range of traditional and eCommerce retailers, wholesalers, and distributors. It also includes pharmaceutical products for dentists and other oral health professionals. The Pet Nutrition segment offers pet nutrition products for everyday nutritional needs under the Hill's Science Diet brand; and a range of therapeutic products to manage disease conditions in dogs and cats under the Hill's Prescription Diet brand.
CL (Colgate-Palmolive Company) trades in the Consumer Defensive sector, specifically Household & Personal Products, with a market capitalization of approximately $70.31B, a trailing P/E of 33.78, a beta of 0.30 versus the broader market, a 52-week range of 74.55-99.33, average daily share volume of 6.0M, a public-listing history dating back to 1973, approximately 34K full-time employees. These structural characteristics shape how CL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.30 indicates CL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. CL pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on CL?
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 CL snapshot
As of May 15, 2026, spot at $88.60, ATM IV 22.81%, IV rank 38.28%, expected move 6.54%. The covered call on CL 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 CL specifically: CL IV at 22.81% is mid-range versus its 1-year history, so the credit collected on a CL covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 6.54% (roughly $5.79 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 CL expiries trade a higher absolute premium for lower per-day decay. Position sizing on CL should anchor to the underlying notional of $88.60 per share and to the trader's directional view on CL stock.
CL covered call setup
The CL 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 CL near $88.60, the first option leg uses a $93.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CL 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 CL shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $88.60 | long |
| Sell 1 | Call | $93.00 | $0.75 |
CL covered call risk and reward
- Net Premium / Debit
- -$8,785.00
- Max Profit (per contract)
- $515.00
- Max Loss (per contract)
- -$8,784.00
- Breakeven(s)
- $87.85
- Risk / Reward Ratio
- 0.059
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.
CL covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on CL. 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% | -$8,784.00 |
| $19.60 | -77.9% | -$6,825.12 |
| $39.19 | -55.8% | -$4,866.23 |
| $58.78 | -33.7% | -$2,907.35 |
| $78.37 | -11.6% | -$948.46 |
| $97.95 | +10.6% | +$515.00 |
| $117.54 | +32.7% | +$515.00 |
| $137.13 | +54.8% | +$515.00 |
| $156.72 | +76.9% | +$515.00 |
| $176.31 | +99.0% | +$515.00 |
When traders use covered call on CL
Covered calls on CL are an income strategy run on existing CL stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
CL thesis for this covered call
The market-implied 1-standard-deviation range for CL extends from approximately $82.81 on the downside to $94.39 on the upside. A CL covered call collects premium on an existing long CL position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CL will breach that level within the expiration window. Current CL IV rank near 38.28% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on CL should anchor more to the directional view and the expected-move geometry. As a Consumer Defensive name, CL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CL-specific events.
CL 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. CL positions also carry Consumer Defensive sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CL alongside the broader basket even when CL-specific fundamentals are unchanged. Short-premium structures like a covered call on CL carry tail risk when realized volatility exceeds the implied move; review historical CL earnings reactions and macro stress periods before sizing. Always rebuild the position from current CL chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on CL?
- A covered call on CL is the covered call strategy applied to CL (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 CL stock trading near $88.60, the strikes shown on this page are snapped to the nearest listed CL chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CL 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 CL covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 22.81%), the computed maximum profit is $515.00 per contract and the computed maximum loss is -$8,784.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CL covered call?
- The breakeven for the CL covered call priced on this page is roughly $87.85 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 CL market-implied 1-standard-deviation expected move is approximately 6.54%; 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 CL?
- Covered calls on CL are an income strategy run on existing CL 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 CL implied volatility affect this covered call?
- CL ATM IV is at 22.81% with IV rank near 38.28%, 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.