MTDR Covered Call Strategy
MTDR (Matador Resources Company), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NYSE.
Matador Resources Company operates as an independent energy firm, primarily engaged in the identification, development, extraction, and acquisition of crude oil and natural gas reserves throughout the United States. Its business operations are structured into two distinct divisions: Exploration and Production, and Midstream. The company's key asset holdings are concentrated in the Wolfcamp and Bone Spring formations within the Delaware Basin, which spans southeastern New Mexico and West Texas. Additionally, Matador maintains active operations in South Texas's Eagle Ford shale play, as well as the Haynesville shale and Cotton Valley plays located in Northwest Louisiana. To support its core upstream activities, Matador also manages midstream operations. These services include natural gas processing, crude oil transportation, and the gathering of oil, natural gas, and produced water.
MTDR (Matador Resources Company) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $6.67B, a trailing P/E of 9.21, a beta of 0.76 versus the broader market, a 52-week range of 37.14-66.84, average daily share volume of 1.9M, a public-listing history dating back to 2012, approximately 483 full-time employees. These structural characteristics shape how MTDR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.76 places MTDR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.21 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. MTDR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on MTDR?
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.
MTDR snapshot
As of August 14, 2026, spot at $53.58, ATM IV 37.80%, IV rank 12.71%, expected move 10.84%. The covered call on MTDR 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 MTDR specifically: MTDR IV at 37.80% is on the cheap side of its 1-year range, which means a premium-selling MTDR covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 10.84% (roughly $5.81 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 MTDR expiries trade a higher absolute premium for lower per-day decay. Position sizing on MTDR should anchor to the underlying notional of $53.58 per share and to the trader's directional view on MTDR stock.
MTDR covered call setup
The MTDR 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 MTDR at $53.58 on that close, the first option leg uses a $57.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MTDR 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 MTDR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $53.58 | long |
| Sell 1 | Call | $57.50 | $1.23 |
MTDR covered call risk and reward
- Net Premium / Debit
- -$5,235.50
- Max Profit (per contract)
- $514.50
- Max Loss (per contract)
- -$5,234.50
- Breakeven(s)
- $52.36
- Risk / Reward Ratio
- 0.098
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.
MTDR covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on MTDR. 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% | -$5,234.50 |
| $11.86 | -77.9% | -$4,049.93 |
| $23.70 | -55.8% | -$2,865.35 |
| $35.55 | -33.7% | -$1,680.78 |
| $47.39 | -11.5% | -$496.21 |
| $59.24 | +10.6% | +$514.50 |
| $71.08 | +32.7% | +$514.50 |
| $82.93 | +54.8% | +$514.50 |
| $94.78 | +76.9% | +$514.50 |
| $106.62 | +99.0% | +$514.50 |
When traders use covered call on MTDR
Covered calls on MTDR are an income strategy run on existing MTDR stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
MTDR thesis for this covered call
The market-implied 1-standard-deviation range for MTDR extends from approximately $47.77 on the downside to $59.39 on the upside. A MTDR covered call collects premium on an existing long MTDR position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MTDR will breach that level within the expiration window. Current MTDR IV rank near 12.71% 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 MTDR at 37.80%. As a Energy name, MTDR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MTDR-specific events.
MTDR 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. MTDR positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MTDR alongside the broader basket even when MTDR-specific fundamentals are unchanged. Short-premium structures like a covered call on MTDR carry tail risk when realized volatility exceeds the implied move; review historical MTDR earnings reactions and macro stress periods before sizing. Always rebuild the position from current MTDR chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on MTDR?
- A covered call on MTDR is the covered call strategy applied to MTDR (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 MTDR stock at $53.58 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed MTDR chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are MTDR 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 MTDR covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.80%), the computed maximum profit is $514.50 per contract and the computed maximum loss is -$5,234.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a MTDR covered call?
- The breakeven for the MTDR covered call priced on this page is roughly $52.36 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 MTDR market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.84%; 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 MTDR?
- Covered calls on MTDR are an income strategy run on existing MTDR 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 MTDR implied volatility affect this covered call?
- MTDR ATM IV is at 37.80% with IV rank near 12.71%, 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.