NXRT Covered Call Strategy
NXRT (NexPoint Residential Trust, Inc.), in the Real Estate sector, (REIT - Residential industry), listed on NYSE.
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol NXRT, primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with value-add potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.
NXRT (NexPoint Residential Trust, Inc.) trades in the Real Estate sector, specifically REIT - Residential, with a market capitalization of approximately $740.0M, a beta of 1.22 versus the broader market, a 52-week range of 23.79-37.14, average daily share volume of 222K, a public-listing history dating back to 2015, approximately 2 full-time employees. These structural characteristics shape how NXRT stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.22 places NXRT roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. NXRT pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on NXRT?
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 NXRT snapshot
As of May 15, 2026, spot at $28.10, ATM IV 7.20%, IV rank 0.00%, expected move 2.06%. The covered call on NXRT 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 NXRT specifically: NXRT IV at 7.20% is on the cheap side of its 1-year range, which means a premium-selling NXRT covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 2.06% (roughly $0.58 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 NXRT expiries trade a higher absolute premium for lower per-day decay. Position sizing on NXRT should anchor to the underlying notional of $28.10 per share and to the trader's directional view on NXRT stock.
NXRT covered call setup
The NXRT 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 NXRT near $28.10, the first option leg uses a $29.51 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed NXRT 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 NXRT shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $28.10 | long |
| Sell 1 | Call | $29.51 | N/A |
NXRT 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.
NXRT covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on NXRT. 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 NXRT
Covered calls on NXRT are an income strategy run on existing NXRT stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
NXRT thesis for this covered call
The market-implied 1-standard-deviation range for NXRT extends from approximately $27.52 on the downside to $28.68 on the upside. A NXRT covered call collects premium on an existing long NXRT position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether NXRT will breach that level within the expiration window. Current NXRT IV rank near 0.00% 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 NXRT at 7.20%. As a Real Estate name, NXRT options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to NXRT-specific events.
NXRT 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. NXRT positions also carry Real Estate sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move NXRT alongside the broader basket even when NXRT-specific fundamentals are unchanged. Short-premium structures like a covered call on NXRT carry tail risk when realized volatility exceeds the implied move; review historical NXRT earnings reactions and macro stress periods before sizing. Always rebuild the position from current NXRT chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on NXRT?
- A covered call on NXRT is the covered call strategy applied to NXRT (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 NXRT stock trading near $28.10, the strikes shown on this page are snapped to the nearest listed NXRT chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are NXRT 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 NXRT covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 7.20%), 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 NXRT covered call?
- The breakeven for the NXRT 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 NXRT market-implied 1-standard-deviation expected move is approximately 2.06%; 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 NXRT?
- Covered calls on NXRT are an income strategy run on existing NXRT 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 NXRT implied volatility affect this covered call?
- NXRT ATM IV is at 7.20% with IV rank near 0.00%, 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.