LPG Covered Call Strategy
LPG (Dorian LPG Ltd.), in the Energy sector, (Oil & Gas Midstream industry), listed on NYSE.
Dorian LPG Ltd., together with its subsidiaries, engages in the transportation of liquefied petroleum gas (LPG) through its LPG tankers worldwide. The company owns and operates very large gas carriers (VLGCs). As of May 27, 2022, its fleet consisted of twenty-two VLGCs. The company was incorporated in 2013 and is headquartered in Stamford, Connecticut.
LPG (Dorian LPG Ltd.) trades in the Energy sector, specifically Oil & Gas Midstream, with a market capitalization of approximately $1.74B, a trailing P/E of 14.33, a beta of 0.76 versus the broader market, a 52-week range of 20.03-41.15, average daily share volume of 521K, a public-listing history dating back to 2014, approximately 577 full-time employees. These structural characteristics shape how LPG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.76 places LPG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. LPG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on LPG?
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 LPG snapshot
As of May 14, 2026, spot at $40.81, ATM IV 42.90%, IV rank 10.04%, expected move 12.30%. The covered call on LPG 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 LPG specifically: LPG IV at 42.90% is on the cheap side of its 1-year range, which means a premium-selling LPG covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 12.30% (roughly $5.02 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 LPG expiries trade a higher absolute premium for lower per-day decay. Position sizing on LPG should anchor to the underlying notional of $40.81 per share and to the trader's directional view on LPG stock.
LPG covered call setup
The LPG 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 LPG near $40.81, the first option leg uses a $42.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LPG 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 LPG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $40.81 | long |
| Sell 1 | Call | $42.50 | $1.40 |
LPG covered call risk and reward
- Net Premium / Debit
- -$3,941.00
- Max Profit (per contract)
- $309.00
- Max Loss (per contract)
- -$3,940.00
- Breakeven(s)
- $39.41
- Risk / Reward Ratio
- 0.078
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.
LPG covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on LPG. 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% | -$3,940.00 |
| $9.03 | -77.9% | -$3,037.78 |
| $18.05 | -55.8% | -$2,135.56 |
| $27.08 | -33.7% | -$1,233.34 |
| $36.10 | -11.5% | -$331.12 |
| $45.12 | +10.6% | +$309.00 |
| $54.14 | +32.7% | +$309.00 |
| $63.17 | +54.8% | +$309.00 |
| $72.19 | +76.9% | +$309.00 |
| $81.21 | +99.0% | +$309.00 |
When traders use covered call on LPG
Covered calls on LPG are an income strategy run on existing LPG stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
LPG thesis for this covered call
The market-implied 1-standard-deviation range for LPG extends from approximately $35.79 on the downside to $45.83 on the upside. A LPG covered call collects premium on an existing long LPG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether LPG will breach that level within the expiration window. Current LPG IV rank near 10.04% 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 LPG at 42.90%. As a Energy name, LPG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LPG-specific events.
LPG 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. LPG positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LPG alongside the broader basket even when LPG-specific fundamentals are unchanged. Short-premium structures like a covered call on LPG carry tail risk when realized volatility exceeds the implied move; review historical LPG earnings reactions and macro stress periods before sizing. Always rebuild the position from current LPG chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on LPG?
- A covered call on LPG is the covered call strategy applied to LPG (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 LPG stock trading near $40.81, the strikes shown on this page are snapped to the nearest listed LPG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LPG 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 LPG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 42.90%), the computed maximum profit is $309.00 per contract and the computed maximum loss is -$3,940.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LPG covered call?
- The breakeven for the LPG covered call priced on this page is roughly $39.41 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 LPG market-implied 1-standard-deviation expected move is approximately 12.30%; 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 LPG?
- Covered calls on LPG are an income strategy run on existing LPG 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 LPG implied volatility affect this covered call?
- LPG ATM IV is at 42.90% with IV rank near 10.04%, 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.