CPSH Covered Call Strategy
CPSH (CPS Technologies Corporation), in the Technology sector, (Hardware, Equipment & Parts industry), listed on NASDAQ.
CPS Technologies Corporation produces and sells advanced material solutions to the transportation, automotive, energy, computing/internet, telecommunication, aerospace, defense, and oil and gas markets. It primarily offers metal matrix composites that are a combination of metal and ceramic, such as baseplates for various applications, including motor controllers used in electric trains, subway cars, wind turbines, and hybrid and electric vehicles; hermetic packages for use in radar, satellite, and avionics applications; baseplates and housings used in modules built with wide band gap semiconductors; and lids and heatspreaders used with integrated circuits for use in internet switches and routers. The company also assembles housings and packages for hybrid circuits. It primarily sells its products to microelectronics systems companies in the United States, Europe, and Asia. The company was formerly known as Ceramics Process Systems Corporation and changed its name to CPS Technologies Corporation in March 2007. CPS Technologies Corporation was incorporated in 1984 and is headquartered in Norton, Massachusetts.
CPSH (CPS Technologies Corporation) trades in the Technology sector, specifically Hardware, Equipment & Parts, with a market capitalization of approximately $73.4M, a trailing P/E of 2,859.23, a beta of 1.78 versus the broader market, a 52-week range of 1.75-6.85, average daily share volume of 252K, a public-listing history dating back to 1994, approximately 92 full-time employees. These structural characteristics shape how CPSH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.78 indicates CPSH has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 2,859.23 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.
What is a covered call on CPSH?
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 CPSH snapshot
As of May 15, 2026, spot at $4.63, ATM IV 105.90%, IV rank 30.74%, expected move 30.36%. The covered call on CPSH 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 CPSH specifically: CPSH IV at 105.90% is mid-range versus its 1-year history, so the credit collected on a CPSH covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 30.36% (roughly $1.41 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 CPSH expiries trade a higher absolute premium for lower per-day decay. Position sizing on CPSH should anchor to the underlying notional of $4.63 per share and to the trader's directional view on CPSH stock.
CPSH covered call setup
The CPSH 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 CPSH near $4.63, the first option leg uses a $4.86 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CPSH 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 CPSH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $4.63 | long |
| Sell 1 | Call | $4.86 | N/A |
CPSH 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.
CPSH covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on CPSH. 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 CPSH
Covered calls on CPSH are an income strategy run on existing CPSH stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
CPSH thesis for this covered call
The market-implied 1-standard-deviation range for CPSH extends from approximately $3.22 on the downside to $6.04 on the upside. A CPSH covered call collects premium on an existing long CPSH position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CPSH will breach that level within the expiration window. Current CPSH IV rank near 30.74% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on CPSH should anchor more to the directional view and the expected-move geometry. As a Technology name, CPSH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CPSH-specific events.
CPSH 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. CPSH positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CPSH alongside the broader basket even when CPSH-specific fundamentals are unchanged. Short-premium structures like a covered call on CPSH carry tail risk when realized volatility exceeds the implied move; review historical CPSH earnings reactions and macro stress periods before sizing. Always rebuild the position from current CPSH chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on CPSH?
- A covered call on CPSH is the covered call strategy applied to CPSH (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 CPSH stock trading near $4.63, the strikes shown on this page are snapped to the nearest listed CPSH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CPSH 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 CPSH covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 105.90%), 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 CPSH covered call?
- The breakeven for the CPSH 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 CPSH market-implied 1-standard-deviation expected move is approximately 30.36%; 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 CPSH?
- Covered calls on CPSH are an income strategy run on existing CPSH 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 CPSH implied volatility affect this covered call?
- CPSH ATM IV is at 105.90% with IV rank near 30.74%, 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.