IVR Covered Call Strategy
IVR (Invesco Mortgage Capital Inc.), in the Real Estate sector, (REIT - Mortgage industry), listed on NYSE.
Invesco Mortgage Capital Inc. functions as a real estate investment trust (REIT), concentrating on acquiring, funding, and overseeing a diverse portfolio of mortgage-backed securities and other assets linked to real estate. Its holdings include both residential and commercial mortgage-backed securities, encompassing those guaranteed by U.S. government agencies or federally chartered corporations, as well as those lacking such guarantees. The company also invests in credit risk transfer (CRT) securities—unsecured obligations from government-sponsored enterprises—alongside residential and commercial mortgage loans, and various other real estate-related financial arrangements. Established in 2008 and based in Atlanta, Georgia, the company has opted for REIT tax status, which typically allows it to bypass federal corporate income taxes by distributing at least 90% of its taxable earnings to shareholders.
IVR (Invesco Mortgage Capital Inc.) trades in the Real Estate sector, specifically REIT - Mortgage, with a market capitalization of approximately $691.5M, a trailing P/E of 6.39, a beta of 1.57 versus the broader market, a 52-week range of 7.1-9.5, average daily share volume of 2.5M, a public-listing history dating back to 2009. These structural characteristics shape how IVR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.57 indicates IVR has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 6.39 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. IVR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on IVR?
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.
IVR snapshot
As of August 14, 2026, spot at $7.49, ATM IV 294.10%, IV rank 60.70%, expected move 84.32%. The covered call on IVR below is built from the 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 IVR specifically: IVR IV at 294.10% is mid-range versus its 1-year history, so the credit collected on a IVR covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 84.32% (roughly $6.32 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 IVR expiries trade a higher absolute premium for lower per-day decay. Position sizing on IVR should anchor to the underlying notional of $7.49 per share and to the trader's directional view on IVR stock.
IVR covered call setup
The IVR 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 IVR at $7.49 on that close, the first option leg uses a $7.86 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed IVR 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 IVR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $7.49 | long |
| Sell 1 | Call | $7.86 | N/A |
IVR 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.
IVR covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on IVR. 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 IVR
Covered calls on IVR are an income strategy run on existing IVR stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
IVR thesis for this covered call
The market-implied 1-standard-deviation range for IVR extends from approximately $1.17 on the downside to $13.81 on the upside. A IVR covered call collects premium on an existing long IVR position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether IVR will breach that level within the expiration window. Current IVR IV rank near 60.70% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on IVR should anchor more to the directional view and the expected-move geometry. As a Real Estate name, IVR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to IVR-specific events.
IVR 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. IVR positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move IVR alongside the broader basket even when IVR-specific fundamentals are unchanged. Short-premium structures like a covered call on IVR carry tail risk when realized volatility exceeds the implied move; review historical IVR earnings reactions and macro stress periods before sizing. Always rebuild the position from current IVR chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on IVR?
- A covered call on IVR is the covered call strategy applied to IVR (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 IVR stock at $7.49 on the most recent close, the strikes shown on this page are snapped to the nearest listed IVR chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are IVR 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 IVR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 294.10%), 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 IVR covered call?
- The breakeven for the IVR covered call priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 IVR market-implied 1-standard-deviation expected move in the same options snapshot is approximately 84.32%; 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 IVR?
- Covered calls on IVR are an income strategy run on existing IVR 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 IVR implied volatility affect this covered call?
- IVR ATM IV is at 294.10% with IV rank near 60.70%, 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.