LOOP Covered Call Strategy
LOOP (Loop Industries, Inc.), in the Basic Materials sector, (Chemicals - Specialty industry), listed on NASDAQ.
Loop Industries, Inc., a technology company, focuses on depolymerizing waste polyethylene terephthalate (PET) plastics and polyester fibers into base building blocks. It polymerized monomers into virgin-quality PET resins for use in food-grade plastic packaging, such as plastic bottles for water and carbonated soft drinks, and containers for food and other consumer products; and polyester fibers, including textiles, clothing, and apparel. The company was incorporated in 2010 and is based in Terrebonne, Canada.
LOOP (Loop Industries, Inc.) trades in the Basic Materials sector, specifically Chemicals - Specialty, with a market capitalization of approximately $69.6M, a beta of 1.44 versus the broader market, a 52-week range of 0.853-2.29, average daily share volume of 71K, a public-listing history dating back to 2017, approximately 50 full-time employees. These structural characteristics shape how LOOP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.44 indicates LOOP 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 LOOP?
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 LOOP snapshot
As of May 14, 2026, spot at $1.45, ATM IV 27.70%, IV rank 2.10%, expected move 7.94%. The covered call on LOOP 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 35-day expiry.
Why this covered call structure on LOOP specifically: LOOP IV at 27.70% is on the cheap side of its 1-year range, which means a premium-selling LOOP covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 7.94% (roughly $0.12 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 LOOP expiries trade a higher absolute premium for lower per-day decay. Position sizing on LOOP should anchor to the underlying notional of $1.45 per share and to the trader's directional view on LOOP stock.
LOOP covered call setup
The LOOP 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 LOOP near $1.45, the first option leg uses a $1.52 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LOOP 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 LOOP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $1.45 | long |
| Sell 1 | Call | $1.52 | N/A |
LOOP 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.
LOOP covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on LOOP. 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 LOOP
Covered calls on LOOP are an income strategy run on existing LOOP stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
LOOP thesis for this covered call
The market-implied 1-standard-deviation range for LOOP extends from approximately $1.33 on the downside to $1.57 on the upside. A LOOP covered call collects premium on an existing long LOOP position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether LOOP will breach that level within the expiration window. Current LOOP IV rank near 2.10% 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 LOOP at 27.70%. As a Basic Materials name, LOOP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LOOP-specific events.
LOOP 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. LOOP positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LOOP alongside the broader basket even when LOOP-specific fundamentals are unchanged. Short-premium structures like a covered call on LOOP carry tail risk when realized volatility exceeds the implied move; review historical LOOP earnings reactions and macro stress periods before sizing. Always rebuild the position from current LOOP chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on LOOP?
- A covered call on LOOP is the covered call strategy applied to LOOP (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 LOOP stock trading near $1.45, the strikes shown on this page are snapped to the nearest listed LOOP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LOOP 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 LOOP covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 27.70%), 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 LOOP covered call?
- The breakeven for the LOOP covered call priced on this page is no defined breakeven on the modeled curve 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 LOOP market-implied 1-standard-deviation expected move is approximately 7.94%; 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 LOOP?
- Covered calls on LOOP are an income strategy run on existing LOOP 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 LOOP implied volatility affect this covered call?
- LOOP ATM IV is at 27.70% with IV rank near 2.10%, 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.