MEOH Covered Call Strategy
MEOH (Methanex Corporation), in the Basic Materials sector, (Chemicals industry), listed on NASDAQ.
Methanex Corporation produces and supplies methanol in North America, the Asia Pacific, Europe, and South America. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.
MEOH (Methanex Corporation) trades in the Basic Materials sector, specifically Chemicals, with a market capitalization of approximately $4.92B, a beta of 0.84 versus the broader market, a 52-week range of 31.57-66.75, average daily share volume of 1.6M, a public-listing history dating back to 1992, approximately 1K full-time employees. These structural characteristics shape how MEOH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.84 places MEOH roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. MEOH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on MEOH?
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 MEOH snapshot
As of May 15, 2026, spot at $63.70, ATM IV 57.50%, IV rank 75.12%, expected move 16.48%. The covered call on MEOH 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 MEOH specifically: MEOH IV at 57.50% is rich versus its 1-year range, which favors premium-selling structures like a MEOH covered call, with a market-implied 1-standard-deviation move of approximately 16.48% (roughly $10.50 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 MEOH expiries trade a higher absolute premium for lower per-day decay. Position sizing on MEOH should anchor to the underlying notional of $63.70 per share and to the trader's directional view on MEOH stock.
MEOH covered call setup
The MEOH 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 MEOH near $63.70, the first option leg uses a $66.89 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MEOH 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 MEOH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $63.70 | long |
| Sell 1 | Call | $66.89 | N/A |
MEOH covered call risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
MEOH covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on MEOH. 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.
When traders use covered call on MEOH
Covered calls on MEOH are an income strategy run on existing MEOH stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
MEOH thesis for this covered call
The market-implied 1-standard-deviation range for MEOH extends from approximately $53.20 on the downside to $74.20 on the upside. A MEOH covered call collects premium on an existing long MEOH position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MEOH will breach that level within the expiration window. Current MEOH IV rank near 75.12% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on MEOH at 57.50%. As a Basic Materials name, MEOH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MEOH-specific events.
MEOH 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. MEOH positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MEOH alongside the broader basket even when MEOH-specific fundamentals are unchanged. Short-premium structures like a covered call on MEOH carry tail risk when realized volatility exceeds the implied move; review historical MEOH earnings reactions and macro stress periods before sizing. Always rebuild the position from current MEOH chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on MEOH?
- A covered call on MEOH is the covered call strategy applied to MEOH (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 MEOH stock trading near $63.70, the strikes shown on this page are snapped to the nearest listed MEOH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are MEOH 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 MEOH covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 57.50%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MEOH covered call?
- The breakeven for the MEOH covered call priced on this page is no defined breakeven on the modeled curve 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 MEOH market-implied 1-standard-deviation expected move is approximately 16.48%; 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 MEOH?
- Covered calls on MEOH are an income strategy run on existing MEOH 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 MEOH implied volatility affect this covered call?
- MEOH ATM IV is at 57.50% with IV rank near 75.12%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.