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 end-of-day chain at a 30-day expiry (ATM IV 41.20%), the computed maximum profit is $448.50 per contract and the computed maximum loss is -$5,800.50 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 $58.02 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 MTDR market-implied 1-standard-deviation expected move is approximately 11.81%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MTDR implied volatility affect this covered call?

MTDR ATM IV is at 41.20% with IV rank near 26.97%, 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.

MTDR Covered Call Strategy

MTDR (Matador Resources Company), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NYSE.

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations; provides natural gas processing and oil transportation services; and offers oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. As of December 31, 2021, its estimated total proved oil and natural gas reserves were 323.4 million barrels of oil equivalent, including 181.3 million stock tank barrels of oil and 852.5 billion cubic feet of natural gas.

MTDR (Matador Resources Company) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $7.12B, a trailing P/E of 14.64, a beta of 0.80 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 452 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 0.80 places MTDR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. 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.

Current MTDR snapshot

As of May 15, 2026, spot at $60.19, ATM IV 41.20%, IV rank 26.97%, expected move 11.81%. The covered call on MTDR 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 MTDR specifically: MTDR IV at 41.20% 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 11.81% (roughly $7.11 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 MTDR expiries trade a higher absolute premium for lower per-day decay. Position sizing on MTDR should anchor to the underlying notional of $60.19 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 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With MTDR near $60.19, the first option leg uses a $62.50 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 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 MTDR shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$60.19	long
Sell 1	Call	$62.50	$2.18

MTDR covered call risk and reward

Net Premium / Debit: -$5,801.50
Max Profit (per contract): $448.50
Max Loss (per contract): -$5,800.50
Breakeven(s): $58.02
Risk / Reward Ratio: 0.077

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%	-$5,800.50
$13.32	-77.9%	-$4,469.78
$26.62	-55.8%	-$3,139.05
$39.93	-33.7%	-$1,808.33
$53.24	-11.5%	-$477.61
$66.55	+10.6%	+$448.50
$79.85	+32.7%	+$448.50
$93.16	+54.8%	+$448.50
$106.47	+76.9%	+$448.50
$119.78	+99.0%	+$448.50

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 $53.08 on the downside to $67.30 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 26.97% 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 41.20%. 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 trading near $60.19, the strikes shown on this page are snapped to the nearest listed MTDR chain strike and the premiums come straight from the end-of-day 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 end-of-day chain at a 30-day expiry (ATM IV 41.20%), the computed maximum profit is $448.50 per contract and the computed maximum loss is -$5,800.50 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 $58.02 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 MTDR market-implied 1-standard-deviation expected move is approximately 11.81%; 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 41.20% with IV rank near 26.97%, 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.