FEIM Covered Call Strategy

FEIM (Frequency Electronics, Inc.), in the Technology sector, (Communication Equipment industry), listed on NASDAQ.

Frequency Electronics, Inc., together with its subsidiaries, designs, develops, manufactures, and sells precision time and frequency control products and components for microwave integrated circuit applications. It operates through two segments, FEI-NY and FEI-Zyfer. The FEI-NY segment offers precision time, frequency generation, and synchronization products and subsystems used in communication satellites, terrestrial cellular telephone, or other ground-based telecommunication stations; and other components and systems for the United States military. The FEI-Zyfer segment designs, develops, and manufactures products for precision navigation and timing primarily incorporating global positioning system technologies into radar systems, airborne SIGINT/COMINT platforms, information networks, test equipment, military command and control terminals, and satellite ground stations. The company's products are used in commercial, government satellites, secure communications, command, control, communication, computer, intelligence, security and reconnaissance, and electronic warfare applications for the United States government on land, sea, and air-borne platforms. It markets its products directly and through independent sales representative organizations located in the United States, Europe, and Asia.

FEIM (Frequency Electronics, Inc.) trades in the Technology sector, specifically Communication Equipment, with a market capitalization of approximately $601.4M, a trailing P/E of 82.85, a beta of 0.46 versus the broader market, a 52-week range of 17.51-64.99, average daily share volume of 186K, a public-listing history dating back to 1980, approximately 200 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 0.46 indicates FEIM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 82.85 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. 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.

Current FEIM snapshot

As of May 15, 2026, spot at $57.89, ATM IV 84.50%, expected move 24.23%. The covered call on FEIM 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 FEIM specifically: IV rank is unavailable in the current snapshot, so regime-based timing for FEIM is inferred from ATM IV at 84.50% alone, with a market-implied 1-standard-deviation move of approximately 24.23% (roughly $14.02 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 FEIM expiries trade a higher absolute premium for lower per-day decay. Position sizing on FEIM should anchor to the underlying notional of $57.89 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 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With FEIM near $57.89, the first option leg uses a $60.78 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 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 FEIM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$57.89	long
Sell 1	Call	$60.78	N/A

FEIM 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.

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.

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 $43.87 on the downside to $71.91 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. 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 trading near $57.89, the strikes shown on this page are snapped to the nearest listed FEIM chain strike and the premiums come straight from the end-of-day 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 end-of-day chain at a 30-day expiry (ATM IV 84.50%), 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 FEIM covered call?: The breakeven for the FEIM 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 FEIM market-implied 1-standard-deviation expected move is approximately 24.23%; 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?: Current FEIM ATM IV is 84.50%; IV rank context is unavailable in the current snapshot.