How are CMC 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 CMC covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 42.30%), the computed maximum profit is $410.00 per contract and the computed maximum loss is -$6,339.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a CMC covered call?

The breakeven for the CMC covered call priced on this page is roughly $63.40 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 CMC market-implied 1-standard-deviation expected move is approximately 12.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current CMC implied volatility affect this covered call?

CMC ATM IV is at 42.30% with IV rank near 18.73%, 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.

CMC Covered Call Strategy

CMC (Commercial Metals Company), in the Basic Materials sector, (Steel industry), listed on NYSE.

Commercial Metals Company (CMC) is an international enterprise specializing in the production, recycling, and fabrication of steel and metal products, along with providing related services. The company serves markets across the United States, Poland, China, and other international regions. A significant facet of its business involves processing and marketing a wide array of ferrous and non-ferrous scrap metals. These raw materials are supplied to a diverse clientele, including steel mills, foundries, aluminum sheet and ingot producers, brass and bronze ingot makers, copper refineries, secondary lead smelters, specialty steel manufacturers, and high-temperature alloy fabricators. Commercial Metals Company manufactures and distributes a comprehensive range of finished long steel products. These encompass reinforcing bars (rebar), merchant bars, light structural sections, and various other specialized profiles.

CMC (Commercial Metals Company) trades in the Basic Materials sector, specifically Steel, with a market capitalization of approximately $7.66B, a trailing P/E of 12.90, a beta of 1.51 versus the broader market, a 52-week range of 48.14-84.87, average daily share volume of 1.1M, a public-listing history dating back to 1980, approximately 13K full-time employees. These structural characteristics shape how CMC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.51 indicates CMC has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. CMC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on CMC?

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 CMC snapshot

As of June 29, 2026, spot at $64.70, ATM IV 42.30%, IV rank 18.73%, expected move 12.13%. The covered call on CMC 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 18-day expiry.

Why this covered call structure on CMC specifically: CMC IV at 42.30% is on the cheap side of its 1-year range, which means a premium-selling CMC covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 12.13% (roughly $7.85 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CMC expiries trade a higher absolute premium for lower per-day decay. Position sizing on CMC should anchor to the underlying notional of $64.70 per share and to the trader's directional view on CMC stock.

CMC covered call setup

The CMC 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 CMC near $64.70, the first option leg uses a $67.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CMC chain at a 18-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 CMC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$64.70	long
Sell 1	Call	$67.50	$1.30

CMC covered call risk and reward

Net Premium / Debit: -$6,340.00
Max Profit (per contract): $410.00
Max Loss (per contract): -$6,339.00
Breakeven(s): $63.40
Risk / Reward Ratio: 0.065

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.

CMC covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on CMC. 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%	-$6,339.00
$14.31	-77.9%	-$4,908.56
$28.62	-55.8%	-$3,478.12
$42.92	-33.7%	-$2,047.67
$57.23	-11.5%	-$617.23
$71.53	+10.6%	+$410.00
$85.84	+32.7%	+$410.00
$100.14	+54.8%	+$410.00
$114.45	+76.9%	+$410.00
$128.75	+99.0%	+$410.00

When traders use covered call on CMC

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

CMC thesis for this covered call

The market-implied 1-standard-deviation range for CMC extends from approximately $56.85 on the downside to $72.55 on the upside. A CMC covered call collects premium on an existing long CMC position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CMC will breach that level within the expiration window. Current CMC IV rank near 18.73% 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 CMC at 42.30%. As a Basic Materials name, CMC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CMC-specific events.

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

Frequently asked questions

What is a covered call on CMC?: A covered call on CMC is the covered call strategy applied to CMC (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 CMC stock trading near $64.70, the strikes shown on this page are snapped to the nearest listed CMC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are CMC 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 CMC covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 42.30%), the computed maximum profit is $410.00 per contract and the computed maximum loss is -$6,339.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a CMC covered call?: The breakeven for the CMC covered call priced on this page is roughly $63.40 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 CMC market-implied 1-standard-deviation expected move is approximately 12.13%; 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 CMC?: Covered calls on CMC are an income strategy run on existing CMC 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 CMC implied volatility affect this covered call?: CMC ATM IV is at 42.30% with IV rank near 18.73%, 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.