LSTR Covered Call Strategy
LSTR (Landstar System, Inc.), in the Industrials sector, (Integrated Freight & Logistics industry), listed on NASDAQ.
Landstar System, Inc. delivers comprehensive logistics and transportation solutions, operating across North America (U.S., Canada, and Mexico) and globally. The company's operations are divided into two main divisions: Transportation Logistics and Insurance. The core Transportation Logistics segment offers an extensive range of freight movement options. These include full truckload and less-than-truckload (LTL) services, intermodal rail, air and ocean cargo, as well as expedited ground and air delivery for time-critical shipments. This segment also handles specialized transport like heavy-haul projects, cross-border freight between the U.S. and Canada, and the U.S. and Mexico, as well as intra-Mexico and intra-Canada movements, and customs brokerage. Landstar additionally provides transportation services to other logistics providers, such as third-party logistics firms and small parcel carriers.
LSTR (Landstar System, Inc.) trades in the Industrials sector, specifically Integrated Freight & Logistics, with a market capitalization of approximately $7.10B, a trailing P/E of 57.11, a beta of 0.88 versus the broader market, a 52-week range of 119.32-228.46, average daily share volume of 485K, a public-listing history dating back to 1993, approximately 1K full-time employees. These structural characteristics shape how LSTR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.88 places LSTR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 57.11 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. LSTR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on LSTR?
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 LSTR snapshot
As of June 30, 2026, spot at $206.13, ATM IV 36.60%, IV rank 38.25%, expected move 10.49%. The covered call on LSTR 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 LSTR specifically: LSTR IV at 36.60% is mid-range versus its 1-year history, so the credit collected on a LSTR covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 10.49% (roughly $21.63 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 LSTR expiries trade a higher absolute premium for lower per-day decay. Position sizing on LSTR should anchor to the underlying notional of $206.13 per share and to the trader's directional view on LSTR stock.
LSTR covered call setup
The LSTR 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 LSTR near $206.13, the first option leg uses a $220.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed LSTR 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 LSTR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $206.13 | long |
| Sell 1 | Call | $220.00 | $2.20 |
LSTR covered call risk and reward
- Net Premium / Debit
- -$20,393.00
- Max Profit (per contract)
- $1,607.00
- Max Loss (per contract)
- -$20,392.00
- Breakeven(s)
- $203.93
- Risk / Reward Ratio
- 0.079
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.
LSTR covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on LSTR. 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% | -$20,392.00 |
| $45.59 | -77.9% | -$15,834.46 |
| $91.16 | -55.8% | -$11,276.92 |
| $136.74 | -33.7% | -$6,719.39 |
| $182.31 | -11.6% | -$2,161.85 |
| $227.89 | +10.6% | +$1,607.00 |
| $273.46 | +32.7% | +$1,607.00 |
| $319.04 | +54.8% | +$1,607.00 |
| $364.61 | +76.9% | +$1,607.00 |
| $410.19 | +99.0% | +$1,607.00 |
When traders use covered call on LSTR
Covered calls on LSTR are an income strategy run on existing LSTR stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
LSTR thesis for this covered call
The market-implied 1-standard-deviation range for LSTR extends from approximately $184.50 on the downside to $227.76 on the upside. A LSTR covered call collects premium on an existing long LSTR position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether LSTR will breach that level within the expiration window. Current LSTR IV rank near 38.25% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on LSTR should anchor more to the directional view and the expected-move geometry. As a Industrials name, LSTR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to LSTR-specific events.
LSTR 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. LSTR positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move LSTR alongside the broader basket even when LSTR-specific fundamentals are unchanged. Short-premium structures like a covered call on LSTR carry tail risk when realized volatility exceeds the implied move; review historical LSTR earnings reactions and macro stress periods before sizing. Always rebuild the position from current LSTR chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on LSTR?
- A covered call on LSTR is the covered call strategy applied to LSTR (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 LSTR stock trading near $206.13, the strikes shown on this page are snapped to the nearest listed LSTR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are LSTR 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 LSTR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 36.60%), the computed maximum profit is $1,607.00 per contract and the computed maximum loss is -$20,392.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a LSTR covered call?
- The breakeven for the LSTR covered call priced on this page is roughly $203.93 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 LSTR market-implied 1-standard-deviation expected move is approximately 10.49%; 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 LSTR?
- Covered calls on LSTR are an income strategy run on existing LSTR 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 LSTR implied volatility affect this covered call?
- LSTR ATM IV is at 36.60% with IV rank near 38.25%, 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.