MEDP Covered Call Strategy
MEDP (Medpace Holdings, Inc.), in the Healthcare sector, (Medical - Diagnostics & Research industry), listed on NASDAQ.
Medpace Holdings, Inc. provides clinical research-based drug and medical device development services in North America, Europe, and Asia. It offers a suite of services supporting the clinical development process from Phase I to Phase IV in various therapeutic areas. The company also provides clinical development services to the pharmaceutical, biotechnology, and medical device industries; and development plan design, coordinated central laboratory, project management, regulatory affairs, clinical monitoring, data management and analysis, pharmacovigilance new drug application submissions, and post-marketing clinical support services. In addition, it offers bio-analytical laboratory services, clinical human pharmacology, imaging services, and electrocardiography reading support for clinical trials. The company was founded in 1992 and is based in Cincinnati, Ohio.
MEDP (Medpace Holdings, Inc.) trades in the Healthcare sector, specifically Medical - Diagnostics & Research, with a market capitalization of approximately $12.10B, a trailing P/E of 26.18, a beta of 1.19 versus the broader market, a 52-week range of 284.48-628.916, average daily share volume of 398K, a public-listing history dating back to 2016, approximately 6K full-time employees. These structural characteristics shape how MEDP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.19 places MEDP roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a covered call on MEDP?
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 MEDP snapshot
As of May 15, 2026, spot at $417.39, ATM IV 36.60%, IV rank 18.76%, expected move 10.49%. The covered call on MEDP 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 MEDP specifically: MEDP IV at 36.60% is on the cheap side of its 1-year range, which means a premium-selling MEDP covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 10.49% (roughly $43.80 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 MEDP expiries trade a higher absolute premium for lower per-day decay. Position sizing on MEDP should anchor to the underlying notional of $417.39 per share and to the trader's directional view on MEDP stock.
MEDP covered call setup
The MEDP 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 MEDP near $417.39, the first option leg uses a $440.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MEDP 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 MEDP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $417.39 | long |
| Sell 1 | Call | $440.00 | $10.70 |
MEDP covered call risk and reward
- Net Premium / Debit
- -$40,669.00
- Max Profit (per contract)
- $3,331.00
- Max Loss (per contract)
- -$40,668.00
- Breakeven(s)
- $406.69
- Risk / Reward Ratio
- 0.082
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.
MEDP covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on MEDP. 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% | -$40,668.00 |
| $92.30 | -77.9% | -$31,439.39 |
| $184.58 | -55.8% | -$22,210.77 |
| $276.87 | -33.7% | -$12,982.16 |
| $369.15 | -11.6% | -$3,753.55 |
| $461.44 | +10.6% | +$3,331.00 |
| $553.73 | +32.7% | +$3,331.00 |
| $646.01 | +54.8% | +$3,331.00 |
| $738.30 | +76.9% | +$3,331.00 |
| $830.59 | +99.0% | +$3,331.00 |
When traders use covered call on MEDP
Covered calls on MEDP are an income strategy run on existing MEDP stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
MEDP thesis for this covered call
The market-implied 1-standard-deviation range for MEDP extends from approximately $373.59 on the downside to $461.19 on the upside. A MEDP covered call collects premium on an existing long MEDP position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MEDP will breach that level within the expiration window. Current MEDP IV rank near 18.76% 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 MEDP at 36.60%. As a Healthcare name, MEDP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MEDP-specific events.
MEDP 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. MEDP positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MEDP alongside the broader basket even when MEDP-specific fundamentals are unchanged. Short-premium structures like a covered call on MEDP carry tail risk when realized volatility exceeds the implied move; review historical MEDP earnings reactions and macro stress periods before sizing. Always rebuild the position from current MEDP chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on MEDP?
- A covered call on MEDP is the covered call strategy applied to MEDP (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 MEDP stock trading near $417.39, the strikes shown on this page are snapped to the nearest listed MEDP chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MEDP 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 MEDP covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 36.60%), the computed maximum profit is $3,331.00 per contract and the computed maximum loss is -$40,668.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MEDP covered call?
- The breakeven for the MEDP covered call priced on this page is roughly $406.69 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 MEDP 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 MEDP?
- Covered calls on MEDP are an income strategy run on existing MEDP 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 MEDP implied volatility affect this covered call?
- MEDP ATM IV is at 36.60% with IV rank near 18.76%, 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.