NMAD Covered Call Strategy
NMAD (NOMAD Power Solutions, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Lixte Biotechnology Holdings, Inc. is a clinical-stage biopharmaceutical company, which engages in the business of developing a drug class called protein phosphatase 2A inhibitors. The firm is also involved in utilizing biomarker technology to identify enzyme targets associated with serious common diseases and then designing novel compounds to attack those targets. The company was founded by John S. Kovach and Robert B. Royds on May 24, 2005 and is headquartered in Boca Raton, FL.
NMAD (NOMAD Power Solutions, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $48.6M, a beta of 1.30 versus the broader market, a 52-week range of 2.36-8.38, average daily share volume of 482K, a public-listing history dating back to 2020, approximately 3 full-time employees. These structural characteristics shape how NMAD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.30 indicates NMAD 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 NMAD?
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.
NMAD snapshot
As of August 14, 2026, spot at $4.18, ATM IV 46.40%, expected move 13.30%. The covered call on NMAD below is built from the end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this covered call structure on NMAD specifically: IV rank is unavailable in the current snapshot, so regime-based timing for NMAD is inferred from ATM IV at 46.40% alone, with a market-implied 1-standard-deviation move of approximately 13.30% (roughly $0.56 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated NMAD expiries trade a higher absolute premium for lower per-day decay. Position sizing on NMAD should anchor to the underlying notional of $4.18 per share and to the trader's directional view on NMAD stock.
NMAD covered call setup
The NMAD 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 NMAD at $4.18 on that close, the first option leg uses a $4.39 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NMAD chain at a 35-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 NMAD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $4.18 | long |
| Sell 1 | Call | $4.39 | N/A |
NMAD 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.
NMAD covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on NMAD. 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 NMAD
Covered calls on NMAD are an income strategy run on existing NMAD stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
NMAD thesis for this covered call
The market-implied 1-standard-deviation range for NMAD extends from approximately $3.62 on the downside to $4.74 on the upside. A NMAD covered call collects premium on an existing long NMAD position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether NMAD will breach that level within the expiration window. As a Healthcare name, NMAD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NMAD-specific events.
NMAD 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. NMAD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NMAD alongside the broader basket even when NMAD-specific fundamentals are unchanged. Short-premium structures like a covered call on NMAD carry tail risk when realized volatility exceeds the implied move; review historical NMAD earnings reactions and macro stress periods before sizing. Always rebuild the position from current NMAD chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on NMAD?
- A covered call on NMAD is the covered call strategy applied to NMAD (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 NMAD stock at $4.18 on the most recent close, the strikes shown on this page are snapped to the nearest listed NMAD chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are NMAD 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 NMAD covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 46.40%), 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 NMAD covered call?
- The breakeven for the NMAD covered call priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 NMAD market-implied 1-standard-deviation expected move in the same options snapshot is approximately 13.30%; 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 NMAD?
- Covered calls on NMAD are an income strategy run on existing NMAD 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 NMAD implied volatility affect this covered call?
- Current NMAD ATM IV is 46.40%; IV rank context is unavailable in the current snapshot.