KOD Covered Call Strategy
KOD (Kodiak Sciences Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Kodiak Sciences Inc. is a biopharmaceutical firm currently in the clinical development phase, dedicated to discovering, advancing, and bringing to market treatments for various conditions affecting the retina. Their primary drug candidate, KSI-301, is an anti-vascular endothelial growth factor (anti-VEGF) antibody biopolymer. This compound is currently undergoing Phase IIb/III clinical trials, targeting illnesses such as wet age-related macular degeneration (AMD), diabetic macular edema, previously untreated macular edema resulting from retinal vein occlusion, and non-proliferative diabetic retinopathy. In its earlier, preclinical development pipeline, the company is also working on KSI-501, a bispecific conjugate designed for retinal conditions involving inflammation, and KSI-601, a triplet inhibitor aimed at addressing dry AMD. Established in 2009, this Palo Alto, California-based company operated under the name Oligasis, LLC before rebranding as Kodiak Sciences Inc. in September 2015.
KOD (Kodiak Sciences Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $1.90B, a beta of 2.21 versus the broader market, a 52-week range of 3.6-47.84, average daily share volume of 924K, 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 2.21 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 June 30, 2026, spot at $38.73, ATM IV 80.80%, IV rank 4.59%, expected move 23.16%. 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 17-day expiry.
Why this covered call structure on KOD specifically: KOD IV at 80.80% 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 23.16% (roughly $8.97 on the underlying). The 17-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 $38.73 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 $38.73, the first option leg uses a $41.00 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 17-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 | $38.73 | long |
| Sell 1 | Call | $41.00 | $1.50 |
KOD covered call risk and reward
- Net Premium / Debit
- -$3,723.00
- Max Profit (per contract)
- $377.00
- Max Loss (per contract)
- -$3,722.00
- Breakeven(s)
- $37.23
- 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.
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% | -$3,722.00 |
| $8.57 | -77.9% | -$2,865.77 |
| $17.13 | -55.8% | -$2,009.54 |
| $25.70 | -33.7% | -$1,153.31 |
| $34.26 | -11.5% | -$297.08 |
| $42.82 | +10.6% | +$377.00 |
| $51.38 | +32.7% | +$377.00 |
| $59.95 | +54.8% | +$377.00 |
| $68.51 | +76.9% | +$377.00 |
| $77.07 | +99.0% | +$377.00 |
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 $29.76 on the downside to $47.70 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 4.59% 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 80.80%. 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 $38.73, 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 80.80%), the computed maximum profit is $377.00 per contract and the computed maximum loss is -$3,722.00 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 $37.23 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 23.16%; 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 80.80% with IV rank near 4.59%, 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.