How are NG 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 NG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 71.00%), the computed maximum profit is $82.50 per contract and the computed maximum loss is -$516.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a NG covered call?

The breakeven for the NG covered call priced on this page is roughly $5.18 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 NG market-implied 1-standard-deviation expected move is approximately 20.36%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current NG implied volatility affect this covered call?

NG ATM IV is at 71.00% with IV rank near 15.31%, 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.

NG Covered Call Strategy

NG (NovaGold Resources Inc.), in the Basic Materials sector, (Gold industry), listed on AMEX.

NovaGold Resources Inc. (NG) is an enterprise primarily engaged in the discovery and advancement of gold mining properties, with its operational focus predominantly within the United States. A central component of the company's assets is the Donlin Gold project, a significant holding situated in the Kuskokwim region of southwestern Alaska. This expansive site is comprised of 493 individual mining claims, collectively encompassing approximately 29,008 hectares. Founded in 1984, the company initially operated as NovaCan Mining Resources (1985) Limited before rebranding to NovaGold Resources Inc. in March 1987. Its corporate headquarters are located in Vancouver, Canada.

NG (NovaGold Resources Inc.) trades in the Basic Materials sector, specifically Gold, with a market capitalization of approximately $2.79B, a beta of 2.09 versus the broader market, a 52-week range of 4.05-14.4, average daily share volume of 3.4M, a public-listing history dating back to 2003, approximately 14 full-time employees. These structural characteristics shape how NG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.09 indicates NG 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 NG?

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 NG snapshot

As of June 30, 2026, spot at $6.00, ATM IV 71.00%, IV rank 15.31%, expected move 20.36%. The covered call on NG 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 80-day expiry.

Why this covered call structure on NG specifically: NG IV at 71.00% is on the cheap side of its 1-year range, which means a premium-selling NG covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 20.36% (roughly $1.22 on the underlying). The 80-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NG expiries trade a higher absolute premium for lower per-day decay. Position sizing on NG should anchor to the underlying notional of $6.00 per share and to the trader's directional view on NG stock.

NG covered call setup

The NG 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 NG near $6.00, the first option leg uses a $6.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NG chain at a 80-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 NG shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$6.00	long
Sell 1	Call	$6.00	$0.83

NG covered call risk and reward

Net Premium / Debit: -$517.50
Max Profit (per contract): $82.50
Max Loss (per contract): -$516.50
Breakeven(s): $5.18
Risk / Reward Ratio: 0.160

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.

NG covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on NG. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-99.8%	-$516.50
$1.34	-77.7%	-$383.95
$2.66	-55.6%	-$251.39
$3.99	-33.6%	-$118.84
$5.31	-11.5%	+$13.71
$6.64	+10.6%	+$82.50
$7.96	+32.7%	+$82.50
$9.29	+54.8%	+$82.50
$10.61	+76.9%	+$82.50
$11.94	+99.0%	+$82.50

When traders use covered call on NG

Covered calls on NG are an income strategy run on existing NG stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.

NG thesis for this covered call

The market-implied 1-standard-deviation range for NG extends from approximately $4.78 on the downside to $7.22 on the upside. A NG covered call collects premium on an existing long NG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether NG will breach that level within the expiration window. Current NG IV rank near 15.31% 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 NG at 71.00%. As a Basic Materials name, NG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NG-specific events.

NG 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. NG positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NG alongside the broader basket even when NG-specific fundamentals are unchanged. Short-premium structures like a covered call on NG carry tail risk when realized volatility exceeds the implied move; review historical NG earnings reactions and macro stress periods before sizing. Always rebuild the position from current NG chain quotes before placing a trade.

Frequently asked questions

What is a covered call on NG?: A covered call on NG is the covered call strategy applied to NG (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 NG stock trading near $6.00, the strikes shown on this page are snapped to the nearest listed NG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are NG 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 NG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 71.00%), the computed maximum profit is $82.50 per contract and the computed maximum loss is -$516.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a NG covered call?: The breakeven for the NG covered call priced on this page is roughly $5.18 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 NG market-implied 1-standard-deviation expected move is approximately 20.36%; 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 NG?: Covered calls on NG are an income strategy run on existing NG 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 NG implied volatility affect this covered call?: NG ATM IV is at 71.00% with IV rank near 15.31%, 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.