MCRI Covered Call Strategy
MCRI (Monarch Casino & Resort, Inc.), in the Consumer Cyclical sector, (Gambling, Resorts & Casinos industry), listed on NASDAQ.
Monarch Casino & Resort, Inc., through its subsidiaries, owns and operates the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada. The company also owns and operates the Monarch Casino Resort Spa Black Hawk in Black Hawk, Colorado. As of December 31, 2021, its Atlantis Casino Resort Spa featured approximately 61,000 square feet of casino space; 818 guest rooms and suites; 8 food outlets; 2 gourmet coffee and pastry bars; a 30,000 square-foot health spa and salon with an enclosed pool; 2 retail outlets offering clothing and gift shop merchandise; an 8,000 square-foot family entertainment center; and approximately 52,000 square feet of banquet, convention, and meeting room space. The company's Atlantis Casino Resort Spa also featured approximately 1,400 slot and video poker machines; approximately 37 table games, including blackjack, craps, roulette, and others; a race and sports book; a 24-hour live keno lounge; and a poker room. In addition, its Monarch Casino Resort Spa Black Hawk featured approximately 60,000 square feet of casino space; approximately 1,100 slot machines; approximately 40 table games; 10 bars and lounges; 4 dining options; 516 guest rooms and suites; banquet and meeting room space; a retail store; a concierge lounge; an upscale spa and pool facility; and a nine-story parking structure with approximately 1,350 spaces, as well as valet parking with a total parking capacity to approximately 1,500 spaces. The company was founded in 1972 and is based in Reno, Nevada.
MCRI (Monarch Casino & Resort, Inc.) trades in the Consumer Cyclical sector, specifically Gambling, Resorts & Casinos, with a market capitalization of approximately $2.06B, a trailing P/E of 18.99, a beta of 1.36 versus the broader market, a 52-week range of 80.4-120.91, average daily share volume of 135K, a public-listing history dating back to 1993, approximately 3K full-time employees. These structural characteristics shape how MCRI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.36 indicates MCRI has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. MCRI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on MCRI?
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 MCRI snapshot
As of May 15, 2026, spot at $118.06, ATM IV 28.00%, IV rank 3.90%, expected move 8.03%. The covered call on MCRI 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 MCRI specifically: MCRI IV at 28.00% is on the cheap side of its 1-year range, which means a premium-selling MCRI covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 8.03% (roughly $9.48 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 MCRI expiries trade a higher absolute premium for lower per-day decay. Position sizing on MCRI should anchor to the underlying notional of $118.06 per share and to the trader's directional view on MCRI stock.
MCRI covered call setup
The MCRI 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 MCRI near $118.06, the first option leg uses a $125.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MCRI 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 MCRI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $118.06 | long |
| Sell 1 | Call | $125.00 | $1.32 |
MCRI covered call risk and reward
- Net Premium / Debit
- -$11,674.00
- Max Profit (per contract)
- $826.00
- Max Loss (per contract)
- -$11,673.00
- Breakeven(s)
- $116.74
- Risk / Reward Ratio
- 0.071
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.
MCRI covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on MCRI. 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% | -$11,673.00 |
| $26.11 | -77.9% | -$9,062.74 |
| $52.22 | -55.8% | -$6,452.48 |
| $78.32 | -33.7% | -$3,842.22 |
| $104.42 | -11.6% | -$1,231.95 |
| $130.52 | +10.6% | +$826.00 |
| $156.63 | +32.7% | +$826.00 |
| $182.73 | +54.8% | +$826.00 |
| $208.83 | +76.9% | +$826.00 |
| $234.93 | +99.0% | +$826.00 |
When traders use covered call on MCRI
Covered calls on MCRI are an income strategy run on existing MCRI stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
MCRI thesis for this covered call
The market-implied 1-standard-deviation range for MCRI extends from approximately $108.58 on the downside to $127.54 on the upside. A MCRI covered call collects premium on an existing long MCRI position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MCRI will breach that level within the expiration window. Current MCRI IV rank near 3.90% 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 MCRI at 28.00%. As a Consumer Cyclical name, MCRI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MCRI-specific events.
MCRI 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. MCRI positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MCRI alongside the broader basket even when MCRI-specific fundamentals are unchanged. Short-premium structures like a covered call on MCRI carry tail risk when realized volatility exceeds the implied move; review historical MCRI earnings reactions and macro stress periods before sizing. Always rebuild the position from current MCRI chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on MCRI?
- A covered call on MCRI is the covered call strategy applied to MCRI (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 MCRI stock trading near $118.06, the strikes shown on this page are snapped to the nearest listed MCRI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MCRI 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 MCRI covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 28.00%), the computed maximum profit is $826.00 per contract and the computed maximum loss is -$11,673.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MCRI covered call?
- The breakeven for the MCRI covered call priced on this page is roughly $116.74 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 MCRI market-implied 1-standard-deviation expected move is approximately 8.03%; 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 MCRI?
- Covered calls on MCRI are an income strategy run on existing MCRI 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 MCRI implied volatility affect this covered call?
- MCRI ATM IV is at 28.00% with IV rank near 3.90%, 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.