NOG Covered Call Strategy
NOG (Northern Oil and Gas, Inc.), in the Energy sector, (Oil & Gas Exploration & Production industry), listed on NYSE.
Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. The company primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. As of December 31, 2021, it owned working interests in 7,436 gross producing wells; and had proved reserves of 287,682 million barrels of oil equivalent. The company is based in Minnetonka, Minnesota.
NOG (Northern Oil and Gas, Inc.) trades in the Energy sector, specifically Oil & Gas Exploration & Production, with a market capitalization of approximately $2.47B, a beta of 0.77 versus the broader market, a 52-week range of 20.18-32.62, average daily share volume of 2.7M, a public-listing history dating back to 2007, approximately 49 full-time employees. These structural characteristics shape how NOG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.77 places NOG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. NOG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on NOG?
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 NOG snapshot
As of May 15, 2026, spot at $24.34, ATM IV 43.00%, IV rank 12.39%, expected move 12.33%. The covered call on NOG 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 NOG specifically: NOG IV at 43.00% is on the cheap side of its 1-year range, which means a premium-selling NOG covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 12.33% (roughly $3.00 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 NOG expiries trade a higher absolute premium for lower per-day decay. Position sizing on NOG should anchor to the underlying notional of $24.34 per share and to the trader's directional view on NOG stock.
NOG covered call setup
The NOG 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 NOG near $24.34, the first option leg uses a $26.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NOG 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 NOG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $24.34 | long |
| Sell 1 | Call | $26.00 | $0.65 |
NOG covered call risk and reward
- Net Premium / Debit
- -$2,369.00
- Max Profit (per contract)
- $231.00
- Max Loss (per contract)
- -$2,368.00
- Breakeven(s)
- $23.69
- Risk / Reward Ratio
- 0.098
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.
NOG covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on NOG. 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 | -100.0% | -$2,368.00 |
| $5.39 | -77.9% | -$1,829.94 |
| $10.77 | -55.7% | -$1,291.88 |
| $16.15 | -33.6% | -$753.82 |
| $21.53 | -11.5% | -$215.76 |
| $26.91 | +10.6% | +$231.00 |
| $32.29 | +32.7% | +$231.00 |
| $37.67 | +54.8% | +$231.00 |
| $43.05 | +76.9% | +$231.00 |
| $48.44 | +99.0% | +$231.00 |
When traders use covered call on NOG
Covered calls on NOG are an income strategy run on existing NOG stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
NOG thesis for this covered call
The market-implied 1-standard-deviation range for NOG extends from approximately $21.34 on the downside to $27.34 on the upside. A NOG covered call collects premium on an existing long NOG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether NOG will breach that level within the expiration window. Current NOG IV rank near 12.39% 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 NOG at 43.00%. As a Energy name, NOG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NOG-specific events.
NOG 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. NOG positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NOG alongside the broader basket even when NOG-specific fundamentals are unchanged. Short-premium structures like a covered call on NOG carry tail risk when realized volatility exceeds the implied move; review historical NOG earnings reactions and macro stress periods before sizing. Always rebuild the position from current NOG chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on NOG?
- A covered call on NOG is the covered call strategy applied to NOG (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 NOG stock trading near $24.34, the strikes shown on this page are snapped to the nearest listed NOG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NOG 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 NOG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 43.00%), the computed maximum profit is $231.00 per contract and the computed maximum loss is -$2,368.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a NOG covered call?
- The breakeven for the NOG covered call priced on this page is roughly $23.69 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 NOG market-implied 1-standard-deviation expected move is approximately 12.33%; 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 NOG?
- Covered calls on NOG are an income strategy run on existing NOG 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 NOG implied volatility affect this covered call?
- NOG ATM IV is at 43.00% with IV rank near 12.39%, 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.