FEIM Covered Call Strategy
FEIM (Frequency Electronics, Inc.), in the Technology sector, (Communication Equipment industry), listed on NASDAQ.
Frequency Electronics, Inc. (FEIM) is a firm dedicated to the design, development, production, and sale of highly precise timing and frequency control products and their associated components. These specialized items are primarily intended for microwave integrated circuit applications. The company's operations are divided into two main segments. The FEI-NY segment is responsible for advanced timekeeping, frequency generation, and synchronization systems, which find utility in communication satellites, ground-based cellular telecommunication stations, and other similar terrestrial installations. This segment also supplies bespoke components and systems to the United States military. Meanwhile, the FEI-Zyfer segment focuses on crafting precision navigation and timing solutions.
FEIM (Frequency Electronics, Inc.) trades in the Technology sector, specifically Communication Equipment, with a market capitalization of approximately $772.9M, a beta of 0.66 versus the broader market, a 52-week range of 25.54-80.52, average daily share volume of 250K, a public-listing history dating back to 1980, approximately 237 full-time employees. These structural characteristics shape how FEIM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.66 indicates FEIM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. FEIM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on FEIM?
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.
FEIM snapshot
As of August 14, 2026, spot at $77.84, ATM IV 98.70%, IV rank 18.31%, expected move 28.30%. The covered call on FEIM 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 7-day expiry.
Why this covered call structure on FEIM specifically: FEIM IV at 98.70% is on the cheap side of its 1-year range, which means a premium-selling FEIM covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 28.30% (roughly $22.03 on the underlying). The 7-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated FEIM expiries trade a higher absolute premium for lower per-day decay. Position sizing on FEIM should anchor to the underlying notional of $77.84 per share and to the trader's directional view on FEIM stock.
FEIM covered call setup
The FEIM 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 FEIM at $77.84 on that close, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed FEIM chain at a 7-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 FEIM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $77.84 | long |
| Sell 1 | Call | $80.00 | $2.65 |
FEIM covered call risk and reward
- Net Premium / Debit
- -$7,519.00
- Max Profit (per contract)
- $481.00
- Max Loss (per contract)
- -$7,518.00
- Breakeven(s)
- $75.19
- Risk / Reward Ratio
- 0.064
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.
FEIM covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on FEIM. 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% | -$7,518.00 |
| $17.22 | -77.9% | -$5,797.03 |
| $34.43 | -55.8% | -$4,076.05 |
| $51.64 | -33.7% | -$2,355.08 |
| $68.85 | -11.6% | -$634.10 |
| $86.06 | +10.6% | +$481.00 |
| $103.27 | +32.7% | +$481.00 |
| $120.48 | +54.8% | +$481.00 |
| $137.69 | +76.9% | +$481.00 |
| $154.90 | +99.0% | +$481.00 |
When traders use covered call on FEIM
Covered calls on FEIM are an income strategy run on existing FEIM stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
FEIM thesis for this covered call
The market-implied 1-standard-deviation range for FEIM extends from approximately $55.81 on the downside to $99.87 on the upside. A FEIM covered call collects premium on an existing long FEIM position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether FEIM will breach that level within the expiration window. Current FEIM IV rank near 18.31% 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 FEIM at 98.70%. As a Technology name, FEIM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to FEIM-specific events.
FEIM 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. FEIM positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move FEIM alongside the broader basket even when FEIM-specific fundamentals are unchanged. Short-premium structures like a covered call on FEIM carry tail risk when realized volatility exceeds the implied move; review historical FEIM earnings reactions and macro stress periods before sizing. Always rebuild the position from current FEIM chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on FEIM?
- A covered call on FEIM is the covered call strategy applied to FEIM (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 FEIM stock at $77.84 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed FEIM chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are FEIM 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 FEIM covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 98.70%), the computed maximum profit is $481.00 per contract and the computed maximum loss is -$7,518.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a FEIM covered call?
- The breakeven for the FEIM covered call priced on this page is roughly $75.19 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 FEIM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 28.30%; 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 FEIM?
- Covered calls on FEIM are an income strategy run on existing FEIM 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 FEIM implied volatility affect this covered call?
- FEIM ATM IV is at 98.70% with IV rank near 18.31%, 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.