LHX Covered Call Strategy
LHX (L3Harris Technologies, Inc.), in the Industrials sector, (Aerospace & Defense industry), listed on NYSE.
L3Harris Technologies, Inc. is a prominent technology firm specializing in aerospace and defense, delivering vital, high-stakes solutions to governmental and commercial clients across the globe. Its diverse operations are organized into several key segments: The Integrated Mission Systems division is responsible for providing versatile intelligence, surveillance, and reconnaissance (ISR) platforms, alongside various communication technologies. This unit also offers comprehensive support for fleet management, as well as the development, modification, and routine maintenance of sensors for ISR and airborne operations. Furthermore, it develops and integrates specialized mission systems tailored for naval vessels and maritime operations, including sophisticated signals and multi-intelligence platforms, autonomous surface and undersea vehicles, and advanced power and ship control electronics. Cutting-edge electro-optical and infrared technologies are also part of its offerings. The Space and Airborne Systems segment is dedicated to providing sophisticated space payloads, advanced sensor technologies, and complete mission solutions for space-based operations.
LHX (L3Harris Technologies, Inc.) trades in the Industrials sector, specifically Aerospace & Defense, with a market capitalization of approximately $54.14B, a trailing P/E of 28.99, a beta of 0.75 versus the broader market, a 52-week range of 262.68-379.23, average daily share volume of 1.4M, a public-listing history dating back to 1981, approximately 45K full-time employees. These structural characteristics shape how LHX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.75 places LHX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. LHX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on LHX?
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.
LHX snapshot
As of August 14, 2026, spot at $291.47, ATM IV 24.63%, IV rank 33.94%, expected move 7.06%. The covered call on LHX below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this covered call structure on LHX specifically: LHX IV at 24.63% is mid-range versus its 1-year history, so the credit collected on a LHX covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 7.06% (roughly $20.58 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated LHX expiries trade a higher absolute premium for lower per-day decay. Position sizing on LHX should anchor to the underlying notional of $291.47 per share and to the trader's directional view on LHX stock.
LHX covered call setup
The LHX covered call below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With LHX at $291.47 on that close, the first option leg uses a $305.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LHX chain at a 28-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 LHX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $291.47 | long |
| Sell 1 | Call | $305.00 | $2.95 |
LHX covered call risk and reward
- Net Premium / Debit
- -$28,852.00
- Max Profit (per contract)
- $1,648.00
- Max Loss (per contract)
- -$28,851.00
- Breakeven(s)
- $288.52
- Risk / Reward Ratio
- 0.057
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.
LHX covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on LHX. 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% | -$28,851.00 |
| $64.45 | -77.9% | -$22,406.55 |
| $128.90 | -55.8% | -$15,962.10 |
| $193.34 | -33.7% | -$9,517.64 |
| $257.79 | -11.6% | -$3,073.19 |
| $322.23 | +10.6% | +$1,648.00 |
| $386.68 | +32.7% | +$1,648.00 |
| $451.12 | +54.8% | +$1,648.00 |
| $515.57 | +76.9% | +$1,648.00 |
| $580.01 | +99.0% | +$1,648.00 |
When traders use covered call on LHX
Covered calls on LHX are an income strategy run on existing LHX stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
LHX thesis for this covered call
The market-implied 1-standard-deviation range for LHX extends from approximately $270.89 on the downside to $312.05 on the upside. A LHX covered call collects premium on an existing long LHX position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether LHX will breach that level within the expiration window. Current LHX IV rank near 33.94% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on LHX should anchor more to the directional view and the expected-move geometry. As a Industrials name, LHX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LHX-specific events.
LHX 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. LHX positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LHX alongside the broader basket even when LHX-specific fundamentals are unchanged. Short-premium structures like a covered call on LHX carry tail risk when realized volatility exceeds the implied move; review historical LHX earnings reactions and macro stress periods before sizing. Always rebuild the position from current LHX chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on LHX?
- A covered call on LHX is the covered call strategy applied to LHX (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 LHX stock at $291.47 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed LHX chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are LHX 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 LHX covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 24.63%), the computed maximum profit is $1,648.00 per contract and the computed maximum loss is -$28,851.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LHX covered call?
- The breakeven for the LHX covered call priced on this page is roughly $288.52 at expiration, derived from the August 14, 2026 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 LHX market-implied 1-standard-deviation expected move in the same options snapshot is approximately 7.06%; 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 LHX?
- Covered calls on LHX are an income strategy run on existing LHX 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 LHX implied volatility affect this covered call?
- LHX ATM IV is at 24.63% with IV rank near 33.94%, 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.