How are MDGL 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 MDGL covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.60%), the computed maximum profit is $3,725.00 per contract and the computed maximum loss is -$49,274.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MDGL covered call?

The breakeven for the MDGL covered call priced on this page is roughly $492.75 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 MDGL market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.78%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MDGL implied volatility affect this covered call?

MDGL ATM IV is at 37.60% with IV rank near 3.59%, 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.

MDGL Covered Call Strategy

MDGL (Madrigal Pharmaceuticals, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Madrigal Pharmaceuticals, Inc. is a biopharmaceutical company in the clinical development phase, concentrating its efforts on discovering and commercializing innovative treatments for cardiovascular, metabolic, and liver disorders. Its most advanced drug candidate, resmetirom, functions as a liver-targeted selective thyroid hormone receptor-ß agonist, currently undergoing late-stage (Phase III) clinical trials for managing non-alcoholic steatohepatitis (NASH). The company's pipeline also features MGL-3745, which serves as a secondary or backup compound to resmetirom. Madrigal holds a collaborative agreement with Hoffmann-La Roche, encompassing research, development, and commercialization activities. The company's operations are based out of West Conshohocken, Pennsylvania.

MDGL (Madrigal Pharmaceuticals, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $12.39B, a beta of -1.00 versus the broader market, a 52-week range of 351.32-615, average daily share volume of 343K, a public-listing history dating back to 2007, approximately 915 full-time employees. These structural characteristics shape how MDGL stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of -1.00 indicates MDGL has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.

What is a covered call on MDGL?

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.

MDGL snapshot

As of August 14, 2026, spot at $507.40, ATM IV 37.60%, IV rank 3.59%, expected move 10.78%. The covered call on MDGL 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 35-day expiry.

Why this covered call structure on MDGL specifically: MDGL IV at 37.60% is on the cheap side of its 1-year range, which means a premium-selling MDGL covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 10.78% (roughly $54.70 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 MDGL expiries trade a higher absolute premium for lower per-day decay. Position sizing on MDGL should anchor to the underlying notional of $507.40 per share and to the trader's directional view on MDGL stock.

MDGL covered call setup

The MDGL 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 MDGL at $507.40 on that close, the first option leg uses a $530.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MDGL 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 MDGL shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$507.40	long
Sell 1	Call	$530.00	$14.65

MDGL covered call risk and reward

Net Premium / Debit: -$49,275.00
Max Profit (per contract): $3,725.00
Max Loss (per contract): -$49,274.00
Breakeven(s): $492.75
Risk / Reward Ratio: 0.076

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.

MDGL covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on MDGL. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$49,274.00
$112.20	-77.9%	-$38,055.22
$224.39	-55.8%	-$26,836.43
$336.57	-33.7%	-$15,617.65
$448.76	-11.6%	-$4,398.86
$560.95	+10.6%	+$3,725.00
$673.14	+32.7%	+$3,725.00
$785.32	+54.8%	+$3,725.00
$897.51	+76.9%	+$3,725.00
$1,009.70	+99.0%	+$3,725.00

When traders use covered call on MDGL

Covered calls on MDGL are an income strategy run on existing MDGL stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.

MDGL thesis for this covered call

The market-implied 1-standard-deviation range for MDGL extends from approximately $452.70 on the downside to $562.10 on the upside. A MDGL covered call collects premium on an existing long MDGL position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MDGL will breach that level within the expiration window. Current MDGL IV rank near 3.59% 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 MDGL at 37.60%. As a Healthcare name, MDGL options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MDGL-specific events.

MDGL 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. MDGL positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MDGL alongside the broader basket even when MDGL-specific fundamentals are unchanged. Short-premium structures like a covered call on MDGL carry tail risk when realized volatility exceeds the implied move; review historical MDGL earnings reactions and macro stress periods before sizing. Always rebuild the position from current MDGL chain quotes before placing a trade.

Frequently asked questions

What is a covered call on MDGL?: A covered call on MDGL is the covered call strategy applied to MDGL (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 MDGL stock at $507.40 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed MDGL chain strike and the premiums come straight from that session's bid/ask midpoint.
How are MDGL 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 MDGL covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.60%), the computed maximum profit is $3,725.00 per contract and the computed maximum loss is -$49,274.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MDGL covered call?: The breakeven for the MDGL covered call priced on this page is roughly $492.75 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 MDGL market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.78%; 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 MDGL?: Covered calls on MDGL are an income strategy run on existing MDGL 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 MDGL implied volatility affect this covered call?: MDGL ATM IV is at 37.60% with IV rank near 3.59%, 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.