How are KGS 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 KGS covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 38.50%), the computed maximum profit is $587.50 per contract and the computed maximum loss is -$7,411.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a KGS covered call?

The breakeven for the KGS covered call priced on this page is roughly $74.13 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 KGS market-implied 1-standard-deviation expected move is approximately 11.04%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current KGS implied volatility affect this covered call?

KGS ATM IV is at 38.50% with IV rank near 27.87%, 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.

KGS Covered Call Strategy

KGS (Kodiak Gas Services, Inc.), in the Energy sector, (Oil & Gas Equipment & Services industry), listed on NYSE.

Kodiak Gas Services, Inc. operates contract compression infrastructure for customers in the oil and gas industry in the United States. It operates in two segments, Compression Operations and Other Services. The Compression Operations segment operates company-owned and customer-owned compression infrastructure to enable the production, gathering, and transportation of natural gas and oil. The Other Services segment provides a range of contract services, including station construction, maintenance and overhaul, and other ancillary time and material-based offerings. The company was formerly known as Frontier TopCo, Inc. Kodiak Gas Services, Inc. was founded in 2010 and is based in Montgomery, Texas.

KGS (Kodiak Gas Services, Inc.) trades in the Energy sector, specifically Oil & Gas Equipment & Services, with a market capitalization of approximately $6.72B, a trailing P/E of 95.84, a beta of 0.95 versus the broader market, a 52-week range of 30.061-76.68, average daily share volume of 1.4M, a public-listing history dating back to 2023, approximately 1K full-time employees. These structural characteristics shape how KGS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.95 places KGS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 95.84 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. KGS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on KGS?

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 KGS snapshot

As of May 12, 2026, spot at $75.20, ATM IV 38.50%, IV rank 27.87%, expected move 11.04%. The covered call on KGS 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 KGS specifically: KGS IV at 38.50% is on the cheap side of its 1-year range, which means a premium-selling KGS covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 11.04% (roughly $8.30 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 KGS expiries trade a higher absolute premium for lower per-day decay. Position sizing on KGS should anchor to the underlying notional of $75.20 per share and to the trader's directional view on KGS stock.

KGS covered call setup

The KGS 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 KGS near $75.20, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KGS 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 KGS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$75.20	long
Sell 1	Call	$80.00	$1.08

KGS covered call risk and reward

Net Premium / Debit: -$7,412.50
Max Profit (per contract): $587.50
Max Loss (per contract): -$7,411.50
Breakeven(s): $74.13
Risk / Reward Ratio: 0.079

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.

KGS covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on KGS. 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%	-$7,411.50
$16.64	-77.9%	-$5,748.90
$33.26	-55.8%	-$4,086.29
$49.89	-33.7%	-$2,423.69
$66.51	-11.6%	-$761.09
$83.14	+10.6%	+$587.50
$99.77	+32.7%	+$587.50
$116.39	+54.8%	+$587.50
$133.02	+76.9%	+$587.50
$149.64	+99.0%	+$587.50

When traders use covered call on KGS

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

KGS thesis for this covered call

The market-implied 1-standard-deviation range for KGS extends from approximately $66.90 on the downside to $83.50 on the upside. A KGS covered call collects premium on an existing long KGS position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether KGS will breach that level within the expiration window. Current KGS IV rank near 27.87% 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 KGS at 38.50%. As a Energy name, KGS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KGS-specific events.

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

Frequently asked questions

What is a covered call on KGS?: A covered call on KGS is the covered call strategy applied to KGS (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 KGS stock trading near $75.20, the strikes shown on this page are snapped to the nearest listed KGS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are KGS 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 KGS covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 38.50%), the computed maximum profit is $587.50 per contract and the computed maximum loss is -$7,411.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a KGS covered call?: The breakeven for the KGS covered call priced on this page is roughly $74.13 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 KGS market-implied 1-standard-deviation expected move is approximately 11.04%; 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 KGS?: Covered calls on KGS are an income strategy run on existing KGS 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 KGS implied volatility affect this covered call?: KGS ATM IV is at 38.50% with IV rank near 27.87%, 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.