HRI Covered Call Strategy
HRI (Herc Holdings Inc.), in the Industrials sector, (Rental & Leasing Services industry), listed on NYSE.
Herc Holdings Inc., through its subsidiaries, operates as an equipment rental supplier in the United States and internationally. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment. The company also provides ProSolutions, an industry specific solution-based services, which include power generation, climate control, remediation and restoration, pump, trench shoring, and studio and production equipment; and ProContractor professional grade tools. In addition, it offers various services, including repair, maintenance, equipment management, and safety training; and equipment re-rental and on-site support services, as well as ancillary services, such as equipment transport, rental protection, cleaning, refueling, and labor. Further, the company sells used equipment and contractor supplies, such as construction consumables, tools, small equipment, and safety supplies. It serves non-residential and residential construction, specialty trade, restoration, remediation and environment, and facility maintenance contractors; industrial manufacturing industries, including automotive and aerospace, power, metals and mining, agriculture, pulp, paper and wood, food and beverage, and refineries and petrochemical industries; infrastructure and government sectors; and commercial facilities, hospitality, healthcare, recreation, entertainment production, and special event management customers.
HRI (Herc Holdings Inc.) trades in the Industrials sector, specifically Rental & Leasing Services, with a market capitalization of approximately $4.57B, a beta of 1.91 versus the broader market, a 52-week range of 88.45-188.35, average daily share volume of 659K, a public-listing history dating back to 2006, approximately 8K full-time employees. These structural characteristics shape how HRI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.91 indicates HRI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. HRI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on HRI?
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 HRI snapshot
As of May 15, 2026, spot at $139.59, ATM IV 53.50%, IV rank 27.23%, expected move 15.34%. The covered call on HRI 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 HRI specifically: HRI IV at 53.50% is on the cheap side of its 1-year range, which means a premium-selling HRI covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 15.34% (roughly $21.41 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 HRI expiries trade a higher absolute premium for lower per-day decay. Position sizing on HRI should anchor to the underlying notional of $139.59 per share and to the trader's directional view on HRI stock.
HRI covered call setup
The HRI 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 HRI near $139.59, 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 HRI 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 HRI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $139.59 | long |
| Sell 1 | Call | $145.00 | $5.95 |
HRI covered call risk and reward
- Net Premium / Debit
- -$13,364.00
- Max Profit (per contract)
- $1,136.00
- Max Loss (per contract)
- -$13,363.00
- Breakeven(s)
- $133.64
- Risk / Reward Ratio
- 0.085
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.
HRI covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on HRI. 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% | -$13,363.00 |
| $30.87 | -77.9% | -$10,276.70 |
| $61.74 | -55.8% | -$7,190.40 |
| $92.60 | -33.7% | -$4,104.10 |
| $123.46 | -11.6% | -$1,017.79 |
| $154.33 | +10.6% | +$1,136.00 |
| $185.19 | +32.7% | +$1,136.00 |
| $216.05 | +54.8% | +$1,136.00 |
| $246.91 | +76.9% | +$1,136.00 |
| $277.78 | +99.0% | +$1,136.00 |
When traders use covered call on HRI
Covered calls on HRI are an income strategy run on existing HRI stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
HRI thesis for this covered call
The market-implied 1-standard-deviation range for HRI extends from approximately $118.18 on the downside to $161.00 on the upside. A HRI covered call collects premium on an existing long HRI position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether HRI will breach that level within the expiration window. Current HRI IV rank near 27.23% 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 HRI at 53.50%. As a Industrials name, HRI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HRI-specific events.
HRI 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. HRI positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HRI alongside the broader basket even when HRI-specific fundamentals are unchanged. Short-premium structures like a covered call on HRI carry tail risk when realized volatility exceeds the implied move; review historical HRI earnings reactions and macro stress periods before sizing. Always rebuild the position from current HRI chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on HRI?
- A covered call on HRI is the covered call strategy applied to HRI (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 HRI stock trading near $139.59, the strikes shown on this page are snapped to the nearest listed HRI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are HRI 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 HRI covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 53.50%), the computed maximum profit is $1,136.00 per contract and the computed maximum loss is -$13,363.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a HRI covered call?
- The breakeven for the HRI covered call priced on this page is roughly $133.64 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 HRI market-implied 1-standard-deviation expected move is approximately 15.34%; 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 HRI?
- Covered calls on HRI are an income strategy run on existing HRI 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 HRI implied volatility affect this covered call?
- HRI ATM IV is at 53.50% with IV rank near 27.23%, 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.