GTX Covered Call Strategy
GTX (Garrett Motion Inc.), in the Consumer Cyclical sector, (Auto - Parts industry), listed on NASDAQ.
Garrett Motion Inc., together with its global subsidiaries, specializes in the development, production, and sale of advanced turbocharging and electric-boosting systems. These innovative technologies are supplied to original equipment manufacturers (OEMs) for use in light passenger and commercial vehicles worldwide. The company's product lineup includes turbochargers for gasoline and diesel light vehicles, robust turbochargers for commercial applications, and a suite of automotive software solutions. Furthermore, Garrett Motion distributes its products to the aftermarket through an extensive network of distributors. Established in 2018, the company's corporate headquarters are situated in Rolle, Switzerland.
GTX (Garrett Motion Inc.) trades in the Consumer Cyclical sector, specifically Auto - Parts, with a market capitalization of approximately $5.47B, a trailing P/E of 15.39, a beta of 0.82 versus the broader market, a 52-week range of 12.264-36.25, average daily share volume of 2.7M, a public-listing history dating back to 2018, approximately 6K full-time employees. These structural characteristics shape how GTX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.82 places GTX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. GTX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on GTX?
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.
GTX snapshot
As of August 14, 2026, spot at $29.09, ATM IV 40.90%, IV rank 4.54%, expected move 11.73%. The covered call on GTX 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 GTX specifically: GTX IV at 40.90% is on the cheap side of its 1-year range, which means a premium-selling GTX covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 11.73% (roughly $3.41 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 GTX expiries trade a higher absolute premium for lower per-day decay. Position sizing on GTX should anchor to the underlying notional of $29.09 per share and to the trader's directional view on GTX stock.
GTX covered call setup
The GTX 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 GTX at $29.09 on that close, the first option leg uses a $31.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed GTX 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 GTX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $29.09 | long |
| Sell 1 | Call | $31.00 | $0.55 |
GTX covered call risk and reward
- Net Premium / Debit
- -$2,854.00
- Max Profit (per contract)
- $246.00
- Max Loss (per contract)
- -$2,853.00
- Breakeven(s)
- $28.54
- Risk / Reward Ratio
- 0.086
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.
GTX covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on GTX. 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% | -$2,853.00 |
| $6.44 | -77.9% | -$2,209.91 |
| $12.87 | -55.8% | -$1,566.83 |
| $19.30 | -33.6% | -$923.74 |
| $25.73 | -11.5% | -$280.66 |
| $32.16 | +10.6% | +$246.00 |
| $38.60 | +32.7% | +$246.00 |
| $45.03 | +54.8% | +$246.00 |
| $51.46 | +76.9% | +$246.00 |
| $57.89 | +99.0% | +$246.00 |
When traders use covered call on GTX
Covered calls on GTX are an income strategy run on existing GTX stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
GTX thesis for this covered call
The market-implied 1-standard-deviation range for GTX extends from approximately $25.68 on the downside to $32.50 on the upside. A GTX covered call collects premium on an existing long GTX position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether GTX will breach that level within the expiration window. Current GTX IV rank near 4.54% 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 GTX at 40.90%. As a Consumer Cyclical name, GTX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to GTX-specific events.
GTX 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. GTX positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move GTX alongside the broader basket even when GTX-specific fundamentals are unchanged. Short-premium structures like a covered call on GTX carry tail risk when realized volatility exceeds the implied move; review historical GTX earnings reactions and macro stress periods before sizing. Always rebuild the position from current GTX chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on GTX?
- A covered call on GTX is the covered call strategy applied to GTX (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 GTX stock at $29.09 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed GTX chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are GTX 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 GTX covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 40.90%), the computed maximum profit is $246.00 per contract and the computed maximum loss is -$2,853.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a GTX covered call?
- The breakeven for the GTX covered call priced on this page is roughly $28.54 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 GTX market-implied 1-standard-deviation expected move in the same options snapshot is approximately 11.73%; 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 GTX?
- Covered calls on GTX are an income strategy run on existing GTX 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 GTX implied volatility affect this covered call?
- GTX ATM IV is at 40.90% with IV rank near 4.54%, 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.