EVH Covered Call Strategy
EVH (Evolent Health, Inc.), in the Healthcare sector, (Medical - Healthcare Information Services industry), listed on NYSE.
Evolent Health, Inc., a healthcare company, through its subsidiary, Evolent Health LLC, provides clinical and administrative solutions to payers and providers in the United States. It operates in two segments, Evolent Health Services and Clinical Solutions. The Evolent Health Services segment provides an integrated administrative and clinical platform for health plan administration and population health management. It offers financial and administrative management services, such as health plan services, risk management, analytics and reporting, and leadership and management; and Identifi, a proprietary technology system that aggregates and analyzes data, manages care workflows, and engages patients, population health performance that delivers patient-centric cost-effective care. The Clinical Solutions segment offers specialty care management services support a range of specialty care delivery stakeholders during their transition from fee-for-service to value-based care, independent of their stage of maturation and specific market dynamics in oncology and cardiology; and holistic total cost of care improvement. The company was founded in 2011 and is headquartered in Arlington, Virginia.
EVH (Evolent Health, Inc.) trades in the Healthcare sector, specifically Medical - Healthcare Information Services, with a market capitalization of approximately $464.5M, a beta of 0.84 versus the broader market, a 52-week range of 2.095-12.065, average daily share volume of 3.1M, a public-listing history dating back to 2015, approximately 5K full-time employees. These structural characteristics shape how EVH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.84 places EVH roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a covered call on EVH?
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 EVH snapshot
As of May 15, 2026, spot at $3.99, ATM IV 22.40%, IV rank 0.72%, expected move 6.42%. The covered call on EVH 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 245-day expiry.
Why this covered call structure on EVH specifically: EVH IV at 22.40% is on the cheap side of its 1-year range, which means a premium-selling EVH covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 6.42% (roughly $0.26 on the underlying). The 245-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated EVH expiries trade a higher absolute premium for lower per-day decay. Position sizing on EVH should anchor to the underlying notional of $3.99 per share and to the trader's directional view on EVH stock.
EVH covered call setup
The EVH 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 EVH near $3.99, the first option leg uses a $4.19 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed EVH chain at a 245-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 EVH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $3.99 | long |
| Sell 1 | Call | $4.19 | N/A |
EVH 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.
EVH covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on EVH. 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 EVH
Covered calls on EVH are an income strategy run on existing EVH stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
EVH thesis for this covered call
The market-implied 1-standard-deviation range for EVH extends from approximately $3.73 on the downside to $4.25 on the upside. A EVH covered call collects premium on an existing long EVH position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether EVH will breach that level within the expiration window. Current EVH IV rank near 0.72% 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 EVH at 22.40%. As a Healthcare name, EVH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to EVH-specific events.
EVH 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. EVH positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move EVH alongside the broader basket even when EVH-specific fundamentals are unchanged. Short-premium structures like a covered call on EVH carry tail risk when realized volatility exceeds the implied move; review historical EVH earnings reactions and macro stress periods before sizing. Always rebuild the position from current EVH chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on EVH?
- A covered call on EVH is the covered call strategy applied to EVH (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 EVH stock trading near $3.99, the strikes shown on this page are snapped to the nearest listed EVH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are EVH 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 EVH covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 22.40%), 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 EVH covered call?
- The breakeven for the EVH 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 EVH market-implied 1-standard-deviation expected move is approximately 6.42%; 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 EVH?
- Covered calls on EVH are an income strategy run on existing EVH 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 EVH implied volatility affect this covered call?
- EVH ATM IV is at 22.40% with IV rank near 0.72%, 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.