HIG Covered Call Strategy
HIG (The Hartford Insurance Group, Inc.), in the Financial Services sector, (Insurance - Diversified industry), listed on NYSE.
The Hartford Insurance Group, Inc., together with its subsidiaries, provides insurance and financial services to individual and business customers in the United States, the United Kingdom, and internationally. It operates through Business Insurance, Personal Insurance, Property & Casualty Other Operations, Employee Benefits and Hartford Funds. The company offers insurance coverage, including workers’ compensation, property, automobile, general and professional liability, package business, umbrella, fidelity and surety, marine, livestock, accident, health, and reinsurance through regional offices, branches, sales and policyholder service centers, independent retail agents and brokers, wholesale agents, and reinsurance brokers. The company also provides automobiles, homeowners, and personal umbrella coverages. The Property & Casualty Other Operations segment offers coverage for asbestos and environmental exposures. In addition, it provides group life, disability, and other group coverages to members of employer groups, associations, and affinity groups through direct insurance policies; reinsurance to other insurance companies; employer paid and voluntary product coverages; disability underwriting, administration, and claims processing to self-funded employer plans; leave management solution; distributes its group insurance products and services through brokers, consultants, third-party administrators, trade associations, and private exchanges.
HIG (The Hartford Insurance Group, Inc.) trades in the Financial Services sector, specifically Insurance - Diversified, with a market capitalization of approximately $37.68B, a trailing P/E of 8.76, a beta of 0.46 versus the broader market, a 52-week range of 120.33-146.07, average daily share volume of 1.7M, a public-listing history dating back to 1995, approximately 19K full-time employees. These structural characteristics shape how HIG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.46 indicates HIG 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 8.76 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. HIG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on HIG?
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.
HIG snapshot
As of August 14, 2026, spot at $138.34, ATM IV 17.50%, IV rank 5.35%, expected move 5.02%. The covered call on HIG 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 HIG specifically: HIG IV at 17.50% is on the cheap side of its 1-year range, which means a premium-selling HIG covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 5.02% (roughly $6.94 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 HIG expiries trade a higher absolute premium for lower per-day decay. Position sizing on HIG should anchor to the underlying notional of $138.34 per share and to the trader's directional view on HIG stock.
HIG covered call setup
The HIG 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 HIG at $138.34 on that close, the first option leg uses a $145.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HIG 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 HIG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $138.34 | long |
| Sell 1 | Call | $145.00 | $0.83 |
HIG covered call risk and reward
- Net Premium / Debit
- -$13,751.50
- Max Profit (per contract)
- $748.50
- Max Loss (per contract)
- -$13,750.50
- Breakeven(s)
- $137.52
- Risk / Reward Ratio
- 0.054
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.
HIG covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on HIG. 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% | -$13,750.50 |
| $30.60 | -77.9% | -$10,691.84 |
| $61.18 | -55.8% | -$7,633.17 |
| $91.77 | -33.7% | -$4,574.51 |
| $122.36 | -11.6% | -$1,515.85 |
| $152.94 | +10.6% | +$748.50 |
| $183.53 | +32.7% | +$748.50 |
| $214.12 | +54.8% | +$748.50 |
| $244.70 | +76.9% | +$748.50 |
| $275.29 | +99.0% | +$748.50 |
When traders use covered call on HIG
Covered calls on HIG are an income strategy run on existing HIG stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
HIG thesis for this covered call
The market-implied 1-standard-deviation range for HIG extends from approximately $131.40 on the downside to $145.28 on the upside. A HIG covered call collects premium on an existing long HIG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether HIG will breach that level within the expiration window. Current HIG IV rank near 5.35% 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 HIG at 17.50%. As a Financial Services name, HIG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HIG-specific events.
HIG 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. HIG positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HIG alongside the broader basket even when HIG-specific fundamentals are unchanged. Short-premium structures like a covered call on HIG carry tail risk when realized volatility exceeds the implied move; review historical HIG earnings reactions and macro stress periods before sizing. Always rebuild the position from current HIG chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on HIG?
- A covered call on HIG is the covered call strategy applied to HIG (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 HIG stock at $138.34 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed HIG chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are HIG 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 HIG covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 17.50%), the computed maximum profit is $748.50 per contract and the computed maximum loss is -$13,750.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HIG covered call?
- The breakeven for the HIG covered call priced on this page is roughly $137.52 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 HIG market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.02%; 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 HIG?
- Covered calls on HIG are an income strategy run on existing HIG 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 HIG implied volatility affect this covered call?
- HIG ATM IV is at 17.50% with IV rank near 5.35%, 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.