CXW Covered Call Strategy
CXW (CoreCivic, Inc.), in the Real Estate sector, (REIT - Specialty industry), listed on NYSE.
CoreCivic, Inc. specializes in the ownership and management of a diverse portfolio of correctional institutions, detention centers, and residential reentry facilities throughout the United States. Its operations are organized into three distinct divisions: CoreCivic Safety, CoreCivic Community, and CoreCivic Properties. The company offers a comprehensive suite of services to its government partners, encompassing the administration of correctional and detention services, the provision of a network of residential reentry centers designed to combat the nation's recidivism challenges, and tailored government real estate solutions. Within these facilities, CoreCivic delivers a range of rehabilitative and educational initiatives, including fundamental schooling, spiritual support, practical life skills and vocational training, and programs for substance abuse recovery. As of the close of 2021, CoreCivic's holdings included 46 correctional and detention sites, 26 residential reentry hubs, and 10 properties designated for leasing. The organization was established in 1983 and maintains its principal offices in Brentwood, Tennessee.
CXW (CoreCivic, Inc.) trades in the Real Estate sector, specifically REIT - Specialty, with a market capitalization of approximately $3.32B, a trailing P/E of 27.11, a beta of 0.58 versus the broader market, a 52-week range of 15.74-34.86, average daily share volume of 1.2M, a public-listing history dating back to 1997, approximately 14K full-time employees. These structural characteristics shape how CXW stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.58 indicates CXW has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. CXW pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on CXW?
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.
CXW snapshot
As of August 14, 2026, spot at $32.53, ATM IV 41.90%, IV rank 18.38%, expected move 12.01%. The covered call on CXW 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 CXW specifically: CXW IV at 41.90% is on the cheap side of its 1-year range, which means a premium-selling CXW covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 12.01% (roughly $3.91 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 CXW expiries trade a higher absolute premium for lower per-day decay. Position sizing on CXW should anchor to the underlying notional of $32.53 per share and to the trader's directional view on CXW stock.
CXW covered call setup
The CXW 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 CXW at $32.53 on that close, the first option leg uses a $34.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CXW 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 CXW shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $32.53 | long |
| Sell 1 | Call | $34.00 | $1.03 |
CXW covered call risk and reward
- Net Premium / Debit
- -$3,150.50
- Max Profit (per contract)
- $249.50
- Max Loss (per contract)
- -$3,149.50
- Breakeven(s)
- $31.51
- Risk / Reward Ratio
- 0.079
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.
CXW covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on CXW. 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% | -$3,149.50 |
| $7.20 | -77.9% | -$2,430.35 |
| $14.39 | -55.8% | -$1,711.21 |
| $21.58 | -33.6% | -$992.06 |
| $28.78 | -11.5% | -$272.92 |
| $35.97 | +10.6% | +$249.50 |
| $43.16 | +32.7% | +$249.50 |
| $50.35 | +54.8% | +$249.50 |
| $57.54 | +76.9% | +$249.50 |
| $64.73 | +99.0% | +$249.50 |
When traders use covered call on CXW
Covered calls on CXW are an income strategy run on existing CXW stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
CXW thesis for this covered call
The market-implied 1-standard-deviation range for CXW extends from approximately $28.62 on the downside to $36.44 on the upside. A CXW covered call collects premium on an existing long CXW position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CXW will breach that level within the expiration window. Current CXW IV rank near 18.38% 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 CXW at 41.90%. As a Real Estate name, CXW options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CXW-specific events.
CXW 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. CXW positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CXW alongside the broader basket even when CXW-specific fundamentals are unchanged. Short-premium structures like a covered call on CXW carry tail risk when realized volatility exceeds the implied move; review historical CXW earnings reactions and macro stress periods before sizing. Always rebuild the position from current CXW chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on CXW?
- A covered call on CXW is the covered call strategy applied to CXW (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 CXW stock at $32.53 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed CXW chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are CXW 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 CXW covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 41.90%), the computed maximum profit is $249.50 per contract and the computed maximum loss is -$3,149.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CXW covered call?
- The breakeven for the CXW covered call priced on this page is roughly $31.51 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 CXW market-implied 1-standard-deviation expected move in the same options snapshot is approximately 12.01%; 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 CXW?
- Covered calls on CXW are an income strategy run on existing CXW 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 CXW implied volatility affect this covered call?
- CXW ATM IV is at 41.90% with IV rank near 18.38%, 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.