CLDT Covered Call Strategy
CLDT (Chatham Lodging Trust), in the Real Estate sector, (REIT - Hotel & Motel industry), listed on NYSE.
Chatham Lodging Trust operates as a self-managed, publicly traded real estate investment trust (REIT) primarily concentrating its investments on upscale extended-stay hotels and premium-branded select-service properties. As of September 30, 2020, the company's asset base included interests in 86 hotels, providing a total of 12,040 rooms and suites. This comprises 40 wholly-owned properties, which collectively offer 6,092 rooms and suites across 15 states and the District of Columbia. Furthermore, the trust maintains a minority ownership in the Innkeepers joint ventures, which operate 46 hotels featuring an aggregate of 5,948 rooms and suites.
CLDT (Chatham Lodging Trust) trades in the Real Estate sector, specifically REIT - Hotel & Motel, with a market capitalization of approximately $591.5M, a trailing P/E of 51.17, a beta of 1.10 versus the broader market, a 52-week range of 6.08-13.88, average daily share volume of 389K, a public-listing history dating back to 2010, approximately 16 full-time employees. These structural characteristics shape how CLDT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.10 places CLDT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 51.17 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. CLDT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on CLDT?
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.
CLDT snapshot
As of August 14, 2026, spot at $12.91, ATM IV 28.60%, IV rank 3.25%, expected move 8.20%. The covered call on CLDT below is built from the 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 CLDT specifically: CLDT IV at 28.60% is on the cheap side of its 1-year range, which means a premium-selling CLDT covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 8.20% (roughly $1.06 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 CLDT expiries trade a higher absolute premium for lower per-day decay. Position sizing on CLDT should anchor to the underlying notional of $12.91 per share and to the trader's directional view on CLDT stock.
CLDT covered call setup
The CLDT 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 CLDT at $12.91 on that close, the first option leg uses a $13.56 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CLDT 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 CLDT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $12.91 | long |
| Sell 1 | Call | $13.56 | N/A |
CLDT 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.
CLDT covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on CLDT. 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 CLDT
Covered calls on CLDT are an income strategy run on existing CLDT stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
CLDT thesis for this covered call
The market-implied 1-standard-deviation range for CLDT extends from approximately $11.85 on the downside to $13.97 on the upside. A CLDT covered call collects premium on an existing long CLDT position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CLDT will breach that level within the expiration window. Current CLDT IV rank near 3.25% 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 CLDT at 28.60%. As a Real Estate name, CLDT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CLDT-specific events.
CLDT 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. CLDT positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CLDT alongside the broader basket even when CLDT-specific fundamentals are unchanged. Short-premium structures like a covered call on CLDT carry tail risk when realized volatility exceeds the implied move; review historical CLDT earnings reactions and macro stress periods before sizing. Always rebuild the position from current CLDT chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on CLDT?
- A covered call on CLDT is the covered call strategy applied to CLDT (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 CLDT stock at $12.91 on the most recent close, the strikes shown on this page are snapped to the nearest listed CLDT chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are CLDT 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 CLDT covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 28.60%), 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 CLDT covered call?
- The breakeven for the CLDT covered call priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 CLDT market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.20%; 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 CLDT?
- Covered calls on CLDT are an income strategy run on existing CLDT 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 CLDT implied volatility affect this covered call?
- CLDT ATM IV is at 28.60% with IV rank near 3.25%, 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.