KOD Covered Call Strategy
KOD (Kodiak Sciences Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Kodiak Sciences Inc., a clinical stage biopharmaceutical company, researches, develops, and commercializes therapeutics to treat retinal diseases. Its lead product candidate is KSI-301, an anti-vascular endothelial growth factor antibody biopolymer that is in Phase IIb/III clinical study to treat wet age-related macular degeneration (AMD), as well as for the treatment of diabetic macular edema, naïve macular edema due to retinal vein occlusion, and non-proliferative diabetic retinopathy. The company's preclinical stage product candidate includes KSI-501, a bispecific conjugate to treat retinal diseases with an inflammatory component; and KSI-601, a triplet inhibitor for the treatment of dry AMD. The company was formerly known as Oligasis, LLC and changed its name to Kodiak Sciences Inc. in September 2015. Kodiak Sciences Inc. was incorporated in 2009 and is based in Palo Alto, California.
KOD (Kodiak Sciences Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $2.10B, a beta of 2.32 versus the broader market, a 52-week range of 2.81-47.84, average daily share volume of 1.1M, a public-listing history dating back to 2018, approximately 109 full-time employees. These structural characteristics shape how KOD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.32 indicates KOD has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a covered call on KOD?
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 KOD snapshot
As of May 15, 2026, spot at $36.62, ATM IV 84.50%, IV rank 6.33%, expected move 24.23%. The covered call on KOD 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 KOD specifically: KOD IV at 84.50% is on the cheap side of its 1-year range, which means a premium-selling KOD covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 24.23% (roughly $8.87 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 KOD expiries trade a higher absolute premium for lower per-day decay. Position sizing on KOD should anchor to the underlying notional of $36.62 per share and to the trader's directional view on KOD stock.
KOD covered call setup
The KOD 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 KOD near $36.62, the first option leg uses a $38.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed KOD 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 KOD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $36.62 | long |
| Sell 1 | Call | $38.00 | $3.25 |
KOD covered call risk and reward
- Net Premium / Debit
- -$3,337.00
- Max Profit (per contract)
- $463.00
- Max Loss (per contract)
- -$3,336.00
- Breakeven(s)
- $33.37
- Risk / Reward Ratio
- 0.139
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.
KOD covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on KOD. 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% | -$3,336.00 |
| $8.11 | -77.9% | -$2,526.42 |
| $16.20 | -55.8% | -$1,716.84 |
| $24.30 | -33.7% | -$907.27 |
| $32.39 | -11.5% | -$97.69 |
| $40.49 | +10.6% | +$463.00 |
| $48.58 | +32.7% | +$463.00 |
| $56.68 | +54.8% | +$463.00 |
| $64.78 | +76.9% | +$463.00 |
| $72.87 | +99.0% | +$463.00 |
When traders use covered call on KOD
Covered calls on KOD are an income strategy run on existing KOD stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
KOD thesis for this covered call
The market-implied 1-standard-deviation range for KOD extends from approximately $27.75 on the downside to $45.49 on the upside. A KOD covered call collects premium on an existing long KOD position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether KOD will breach that level within the expiration window. Current KOD IV rank near 6.33% 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 KOD at 84.50%. As a Healthcare name, KOD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to KOD-specific events.
KOD 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. KOD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move KOD alongside the broader basket even when KOD-specific fundamentals are unchanged. Short-premium structures like a covered call on KOD carry tail risk when realized volatility exceeds the implied move; review historical KOD earnings reactions and macro stress periods before sizing. Always rebuild the position from current KOD chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on KOD?
- A covered call on KOD is the covered call strategy applied to KOD (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 KOD stock trading near $36.62, the strikes shown on this page are snapped to the nearest listed KOD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are KOD 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 KOD covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 84.50%), the computed maximum profit is $463.00 per contract and the computed maximum loss is -$3,336.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a KOD covered call?
- The breakeven for the KOD covered call priced on this page is roughly $33.37 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 KOD market-implied 1-standard-deviation expected move is approximately 24.23%; 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 KOD?
- Covered calls on KOD are an income strategy run on existing KOD 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 KOD implied volatility affect this covered call?
- KOD ATM IV is at 84.50% with IV rank near 6.33%, 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.