NEO Covered Call Strategy
NEO (NeoGenomics, Inc.), in the Healthcare sector, (Medical - Diagnostics & Research industry), listed on NASDAQ.
NeoGenomics, Inc. specializes in providing cancer-focused diagnostic and testing services through an extensive network of laboratories located across the United States, Europe, and Asia. The company operates through two distinct divisions: Clinical Services and Pharma Services. Its comprehensive offerings cater to a diverse clientele, including hospitals, reference laboratories, pathologists, oncologists, clinicians, pharmaceutical companies, and researchers. NeoGenomics' advanced testing capabilities encompass cytogenetics, which examines normal and abnormal chromosomes in relation to disease; fluorescence in-situ hybridization (FISH) for detecting and pinpointing specific DNA sequences and genes on chromosomes; and flow cytometry, used to measure cell population characteristics. Additionally, the company provides immunohistochemistry and digital imaging services, enabling the localization of cellular proteins in tissue sections, visualization of scanned slides, and quantitative analysis. Molecular testing, focusing on DNA/RNA analysis and gene structure/function, is also a key offering, alongside morphologic analysis where pathologists microscopically diagnose cells.
NEO (NeoGenomics, Inc.) trades in the Healthcare sector, specifically Medical - Diagnostics & Research, with a market capitalization of approximately $421.9M, a beta of 1.73 versus the broader market, a 52-week range of 5.94-16.92, average daily share volume of 2.6M, a public-listing history dating back to 2004, approximately 3K full-time employees. These structural characteristics shape how NEO stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.73 indicates NEO has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. NEO pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on NEO?
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.
NEO snapshot
As of August 14, 2026, spot at $15.91, ATM IV 61.00%, IV rank 6.04%, expected move 17.49%. The covered call on NEO 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 7-day expiry.
Why this covered call structure on NEO specifically: NEO IV at 61.00% is on the cheap side of its 1-year range, which means a premium-selling NEO covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 17.49% (roughly $2.78 on the underlying). The 7-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NEO expiries trade a higher absolute premium for lower per-day decay. Position sizing on NEO should anchor to the underlying notional of $15.91 per share and to the trader's directional view on NEO stock.
NEO covered call setup
The NEO 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 NEO at $15.91 on that close, the first option leg uses a $17.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NEO chain at a 7-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 NEO shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $15.91 | long |
| Sell 1 | Call | $17.00 | $0.17 |
NEO covered call risk and reward
- Net Premium / Debit
- -$1,574.00
- Max Profit (per contract)
- $126.00
- Max Loss (per contract)
- -$1,573.00
- Breakeven(s)
- $15.74
- Risk / Reward Ratio
- 0.080
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.
NEO covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on NEO. 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 | -99.9% | -$1,573.00 |
| $3.53 | -77.8% | -$1,221.33 |
| $7.04 | -55.7% | -$869.66 |
| $10.56 | -33.6% | -$517.99 |
| $14.08 | -11.5% | -$166.33 |
| $17.59 | +10.6% | +$126.00 |
| $21.11 | +32.7% | +$126.00 |
| $24.63 | +54.8% | +$126.00 |
| $28.14 | +76.9% | +$126.00 |
| $31.66 | +99.0% | +$126.00 |
When traders use covered call on NEO
Covered calls on NEO are an income strategy run on existing NEO stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
NEO thesis for this covered call
The market-implied 1-standard-deviation range for NEO extends from approximately $13.13 on the downside to $18.69 on the upside. A NEO covered call collects premium on an existing long NEO position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether NEO will breach that level within the expiration window. Current NEO IV rank near 6.04% 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 NEO at 61.00%. As a Healthcare name, NEO options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NEO-specific events.
NEO 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. NEO positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NEO alongside the broader basket even when NEO-specific fundamentals are unchanged. Short-premium structures like a covered call on NEO carry tail risk when realized volatility exceeds the implied move; review historical NEO earnings reactions and macro stress periods before sizing. Always rebuild the position from current NEO chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on NEO?
- A covered call on NEO is the covered call strategy applied to NEO (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 NEO stock at $15.91 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed NEO chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are NEO 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 NEO covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 61.00%), the computed maximum profit is $126.00 per contract and the computed maximum loss is -$1,573.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NEO covered call?
- The breakeven for the NEO covered call priced on this page is roughly $15.74 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 NEO market-implied 1-standard-deviation expected move in the same options snapshot is approximately 17.49%; 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 NEO?
- Covered calls on NEO are an income strategy run on existing NEO 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 NEO implied volatility affect this covered call?
- NEO ATM IV is at 61.00% with IV rank near 6.04%, 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.