ELV Covered Call Strategy
ELV (Elevance Health Inc.), in the Healthcare sector, (Medical - Healthcare Plans industry), listed on NYSE.
Elevance Health Inc. operates as a health benefits company. It supports consumers, families, and communities across the entire care journey connecting to the care, support, and resources to lead healthier lives. It serves approximately 118 million people through a portfolio of medical, digital, pharmacy, behavioral, clinical, and care solutions. The company was formerly known as Anthem, Inc. and changed its name to Elevance Health Inc. in June 2022. Elevance Health Inc. was founded in 1944 and is headquartered in Indianapolis, Indiana.
ELV (Elevance Health Inc.) trades in the Healthcare sector, specifically Medical - Healthcare Plans, with a market capitalization of approximately $86.79B, a trailing P/E of 16.81, a beta of 0.67 versus the broader market, a 52-week range of 273.71-412.96, average daily share volume of 1.9M, a public-listing history dating back to 2001, approximately 104K full-time employees. These structural characteristics shape how ELV stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.67 indicates ELV has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. ELV pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on ELV?
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 ELV snapshot
As of May 15, 2026, spot at $394.49, ATM IV 30.10%, IV rank 7.41%, expected move 8.63%. The covered call on ELV 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 ELV specifically: ELV IV at 30.10% is on the cheap side of its 1-year range, which means a premium-selling ELV covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 8.63% (roughly $34.04 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 ELV expiries trade a higher absolute premium for lower per-day decay. Position sizing on ELV should anchor to the underlying notional of $394.49 per share and to the trader's directional view on ELV stock.
ELV covered call setup
The ELV 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 ELV near $394.49, the first option leg uses a $410.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ELV 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 ELV shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $394.49 | long |
| Sell 1 | Call | $410.00 | $7.75 |
ELV covered call risk and reward
- Net Premium / Debit
- -$38,674.00
- Max Profit (per contract)
- $2,326.00
- Max Loss (per contract)
- -$38,673.00
- Breakeven(s)
- $386.74
- Risk / Reward Ratio
- 0.060
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.
ELV covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on ELV. 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% | -$38,673.00 |
| $87.23 | -77.9% | -$29,950.72 |
| $174.46 | -55.8% | -$21,228.44 |
| $261.68 | -33.7% | -$12,506.16 |
| $348.90 | -11.6% | -$3,783.87 |
| $436.12 | +10.6% | +$2,326.00 |
| $523.35 | +32.7% | +$2,326.00 |
| $610.57 | +54.8% | +$2,326.00 |
| $697.79 | +76.9% | +$2,326.00 |
| $785.02 | +99.0% | +$2,326.00 |
When traders use covered call on ELV
Covered calls on ELV are an income strategy run on existing ELV stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
ELV thesis for this covered call
The market-implied 1-standard-deviation range for ELV extends from approximately $360.45 on the downside to $428.53 on the upside. A ELV covered call collects premium on an existing long ELV position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether ELV will breach that level within the expiration window. Current ELV IV rank near 7.41% 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 ELV at 30.10%. As a Healthcare name, ELV options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ELV-specific events.
ELV 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. ELV positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ELV alongside the broader basket even when ELV-specific fundamentals are unchanged. Short-premium structures like a covered call on ELV carry tail risk when realized volatility exceeds the implied move; review historical ELV earnings reactions and macro stress periods before sizing. Always rebuild the position from current ELV chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on ELV?
- A covered call on ELV is the covered call strategy applied to ELV (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 ELV stock trading near $394.49, the strikes shown on this page are snapped to the nearest listed ELV chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ELV 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 ELV covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 30.10%), the computed maximum profit is $2,326.00 per contract and the computed maximum loss is -$38,673.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ELV covered call?
- The breakeven for the ELV covered call priced on this page is roughly $386.74 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 ELV market-implied 1-standard-deviation expected move is approximately 8.63%; 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 ELV?
- Covered calls on ELV are an income strategy run on existing ELV 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 ELV implied volatility affect this covered call?
- ELV ATM IV is at 30.10% with IV rank near 7.41%, 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.