NDLS Covered Call Strategy
NDLS (Noodles & Company), in the Consumer Cyclical sector, (Restaurants industry), listed on NASDAQ.
Noodles & Company, a restaurant concept company, develops and operates fast-casual restaurants. It offers cooked-to-order dishes, including noodles and pasta, soups, salads, and appetizers. As of December 28, 2021, the company operated 448 restaurants in 29 states, which included 372 company locations and 76 franchise locations. Noodles & Company was founded in 1995 and is based in Broomfield, Colorado.
NDLS (Noodles & Company) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $75.0M, a beta of 1.44 versus the broader market, a 52-week range of 3.57-13.95, average daily share volume of 96K, a public-listing history dating back to 2013, approximately 7K full-time employees. These structural characteristics shape how NDLS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.44 indicates NDLS has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a covered call on NDLS?
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 NDLS snapshot
As of May 15, 2026, spot at $12.25, ATM IV 43.80%, IV rank 3.18%, expected move 12.56%. The covered call on NDLS 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 98-day expiry.
Why this covered call structure on NDLS specifically: NDLS IV at 43.80% is on the cheap side of its 1-year range, which means a premium-selling NDLS covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 12.56% (roughly $1.54 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NDLS expiries trade a higher absolute premium for lower per-day decay. Position sizing on NDLS should anchor to the underlying notional of $12.25 per share and to the trader's directional view on NDLS stock.
NDLS covered call setup
The NDLS 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 NDLS near $12.25, the first option leg uses a $12.86 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NDLS chain at a 98-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 NDLS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $12.25 | long |
| Sell 1 | Call | $12.86 | N/A |
NDLS 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.
NDLS covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on NDLS. 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 NDLS
Covered calls on NDLS are an income strategy run on existing NDLS stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
NDLS thesis for this covered call
The market-implied 1-standard-deviation range for NDLS extends from approximately $10.71 on the downside to $13.79 on the upside. A NDLS covered call collects premium on an existing long NDLS position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether NDLS will breach that level within the expiration window. Current NDLS IV rank near 3.18% 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 NDLS at 43.80%. As a Consumer Cyclical name, NDLS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NDLS-specific events.
NDLS 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. NDLS positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NDLS alongside the broader basket even when NDLS-specific fundamentals are unchanged. Short-premium structures like a covered call on NDLS carry tail risk when realized volatility exceeds the implied move; review historical NDLS earnings reactions and macro stress periods before sizing. Always rebuild the position from current NDLS chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on NDLS?
- A covered call on NDLS is the covered call strategy applied to NDLS (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 NDLS stock trading near $12.25, the strikes shown on this page are snapped to the nearest listed NDLS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NDLS 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 NDLS covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 43.80%), 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 NDLS covered call?
- The breakeven for the NDLS 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 NDLS market-implied 1-standard-deviation expected move is approximately 12.56%; 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 NDLS?
- Covered calls on NDLS are an income strategy run on existing NDLS 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 NDLS implied volatility affect this covered call?
- NDLS ATM IV is at 43.80% with IV rank near 3.18%, 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.