HUM Covered Call Strategy

HUM (Humana Inc.), in the Healthcare sector, (Medical - Healthcare Plans industry), listed on NYSE.

Humana Inc., a prominent health and well-being enterprise, operates across the United States through its various subsidiary companies. Its operational structure is divided into three main segments: Retail, Group and Specialty, and Healthcare Services. The firm provides a wide array of medical and supplementary insurance plans directly to individual consumers. Furthermore, Humana collaborates with government entities; it holds a contract with the Centers for Medicare and Medicaid Services (CMS) to manage the Limited Income Newly Eligible Transition (LI NET) prescription drug program. The company also secures agreements with numerous states to deliver Medicaid, dual-eligible, and long-term care support benefits. For employer groups and individuals, Humana furnishes fully insured commercial medical and specialized health coverage, which encompasses dental, vision, and other ancillary health benefits.

HUM (Humana Inc.) trades in the Healthcare sector, specifically Medical - Healthcare Plans, with a market capitalization of approximately $46.08B, a trailing P/E of 40.87, a beta of 0.77 versus the broader market, a 52-week range of 163.11-385.49, average daily share volume of 1.7M, a public-listing history dating back to 1981, approximately 66K full-time employees. These structural characteristics shape how HUM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.77 places HUM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 40.87 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. HUM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on HUM?

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 HUM snapshot

As of June 30, 2026, spot at $394.41, ATM IV 53.80%, IV rank 49.32%, expected move 15.42%. The covered call on HUM 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 31-day expiry.

Why this covered call structure on HUM specifically: HUM IV at 53.80% is mid-range versus its 1-year history, so the credit collected on a HUM covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 15.42% (roughly $60.83 on the underlying). The 31-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated HUM expiries trade a higher absolute premium for lower per-day decay. Position sizing on HUM should anchor to the underlying notional of $394.41 per share and to the trader's directional view on HUM stock.

HUM covered call setup

The HUM 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 HUM near $394.41, the first option leg uses a $415.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed HUM chain at a 31-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 HUM shares for the stock leg in covered calls and collars).

HUM covered call risk and reward

Net Premium / Debit

-$37,706.00

Max Profit (per contract)

$3,794.00

Max Loss (per contract)

-$37,705.00

Breakeven(s)

$377.06

Risk / Reward Ratio

0.101

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.

HUM covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on HUM. 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 HUM

Covered calls on HUM are an income strategy run on existing HUM stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.

HUM thesis for this covered call

The market-implied 1-standard-deviation range for HUM extends from approximately $333.58 on the downside to $455.24 on the upside. A HUM covered call collects premium on an existing long HUM position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether HUM will breach that level within the expiration window. Current HUM IV rank near 49.32% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on HUM should anchor more to the directional view and the expected-move geometry. As a Healthcare name, HUM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to HUM-specific events.

HUM 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. HUM positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move HUM alongside the broader basket even when HUM-specific fundamentals are unchanged. Short-premium structures like a covered call on HUM carry tail risk when realized volatility exceeds the implied move; review historical HUM earnings reactions and macro stress periods before sizing. Always rebuild the position from current HUM chain quotes before placing a trade.

Frequently asked questions

What is a covered call on HUM?

A covered call on HUM is the covered call strategy applied to HUM (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 HUM stock trading near $394.41, the strikes shown on this page are snapped to the nearest listed HUM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.

How are HUM 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 HUM covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 53.80%), the computed maximum profit is $3,794.00 per contract and the computed maximum loss is -$37,705.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a HUM covered call?

The breakeven for the HUM covered call priced on this page is roughly $377.06 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 HUM market-implied 1-standard-deviation expected move is approximately 15.42%; 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 HUM?

Covered calls on HUM are an income strategy run on existing HUM 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 HUM implied volatility affect this covered call?

HUM ATM IV is at 53.80% with IV rank near 49.32%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.

Related HUM analysis

• Covered Call strategy reference
• HUM options overview
• HUM P&L curve (full chain)
• HUM options chain
• HUM volatility skew