NAT Covered Call Strategy
NAT (Nordic American Tankers Limited), in the Industrials sector, (Marine Shipping industry), listed on NYSE.
Nordic American Tankers Limited, a tanker company, acquires and charters double-hull tankers in Bermuda and internationally. It operates a fleet of 24 Suezmax crude oil tankers. The company was formerly known as Nordic American Tanker Shipping Limited and changed its name to Nordic American Tankers Limited in June 2011. The company was incorporated in 1995 and is based in Hamilton, Bermuda.
NAT (Nordic American Tankers Limited) trades in the Industrials sector, specifically Marine Shipping, with a market capitalization of approximately $1.19B, a trailing P/E of 96.62, a beta of -0.52 versus the broader market, a 52-week range of 2.55-6.34, average daily share volume of 5.1M, a public-listing history dating back to 1997, approximately 15 full-time employees. These structural characteristics shape how NAT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of -0.52 indicates NAT has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 96.62 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. NAT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on NAT?
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 NAT snapshot
As of May 15, 2026, spot at $5.46, ATM IV 61.10%, IV rank 19.69%, expected move 17.52%. The covered call on NAT 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 NAT specifically: NAT IV at 61.10% is on the cheap side of its 1-year range, which means a premium-selling NAT covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 17.52% (roughly $0.96 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 NAT expiries trade a higher absolute premium for lower per-day decay. Position sizing on NAT should anchor to the underlying notional of $5.46 per share and to the trader's directional view on NAT stock.
NAT covered call setup
The NAT 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 NAT near $5.46, the first option leg uses a $5.73 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NAT 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 NAT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $5.46 | long |
| Sell 1 | Call | $5.73 | N/A |
NAT 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.
NAT covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on NAT. 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 NAT
Covered calls on NAT are an income strategy run on existing NAT stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
NAT thesis for this covered call
The market-implied 1-standard-deviation range for NAT extends from approximately $4.50 on the downside to $6.42 on the upside. A NAT covered call collects premium on an existing long NAT position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether NAT will breach that level within the expiration window. Current NAT IV rank near 19.69% 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 NAT at 61.10%. As a Industrials name, NAT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NAT-specific events.
NAT 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. NAT positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NAT alongside the broader basket even when NAT-specific fundamentals are unchanged. Short-premium structures like a covered call on NAT carry tail risk when realized volatility exceeds the implied move; review historical NAT earnings reactions and macro stress periods before sizing. Always rebuild the position from current NAT chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on NAT?
- A covered call on NAT is the covered call strategy applied to NAT (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 NAT stock trading near $5.46, the strikes shown on this page are snapped to the nearest listed NAT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NAT 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 NAT covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 61.10%), 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 NAT covered call?
- The breakeven for the NAT 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 NAT market-implied 1-standard-deviation expected move is approximately 17.52%; 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 NAT?
- Covered calls on NAT are an income strategy run on existing NAT 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 NAT implied volatility affect this covered call?
- NAT ATM IV is at 61.10% with IV rank near 19.69%, 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.