OTTR Covered Call Strategy
OTTR (Otter Tail Corporation), in the Industrials sector, (Conglomerates industry), listed on NASDAQ.
Otter Tail Corporation, an entity founded in 1907 and based in Fergus Falls, Minnesota, is a diversified enterprise conducting business in the United States across three primary sectors: an electric utility, manufacturing operations, and the production of plastic pipes. The company adopted its current name in 2001, having previously been known as Otter Tail Power Company. The Electric segment is responsible for generating, transmitting, distributing, and selling electricity. It serves approximately 133,000 residential, industrial, and commercial customers across Minnesota, North Dakota, and South Dakota. This segment draws its power from a mix of sources including coal, wind, hydroelectric, and natural gas, and actively participates in the Midcontinent Independent System Operator, Inc. (MISO) markets. Through its Manufacturing segment, the company offers services such as contract machining, metal parts stamping, fabrication, and painting.
OTTR (Otter Tail Corporation) trades in the Industrials sector, specifically Conglomerates, with a market capitalization of approximately $3.87B, a trailing P/E of 19.81, a beta of 0.43 versus the broader market, a 52-week range of 74.15-95.09, average daily share volume of 268K, a public-listing history dating back to 1990, approximately 2K full-time employees. These structural characteristics shape how OTTR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.43 indicates OTTR has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. OTTR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on OTTR?
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.
OTTR snapshot
As of August 14, 2026, spot at $93.21, ATM IV 287.70%, IV rank 57.12%, expected move 5.00%. The covered call on OTTR 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 OTTR specifically: OTTR IV at 287.70% is mid-range versus its 1-year history, so the credit collected on a OTTR covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 5.00% (roughly $4.66 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 OTTR expiries trade a higher absolute premium for lower per-day decay. Position sizing on OTTR should anchor to the underlying notional of $93.21 per share and to the trader's directional view on OTTR stock.
OTTR covered call setup
The OTTR 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 OTTR at $93.21 on that close, the first option leg uses a $97.87 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OTTR 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 OTTR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $93.21 | long |
| Sell 1 | Call | $97.87 | N/A |
OTTR 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.
OTTR covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on OTTR. 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 OTTR
Covered calls on OTTR are an income strategy run on existing OTTR stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
OTTR thesis for this covered call
The market-implied 1-standard-deviation range for OTTR extends from approximately $88.55 on the downside to $97.87 on the upside. A OTTR covered call collects premium on an existing long OTTR position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether OTTR will breach that level within the expiration window. Current OTTR IV rank near 57.12% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on OTTR should anchor more to the directional view and the expected-move geometry. As a Industrials name, OTTR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OTTR-specific events.
OTTR 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. OTTR positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OTTR alongside the broader basket even when OTTR-specific fundamentals are unchanged. Short-premium structures like a covered call on OTTR carry tail risk when realized volatility exceeds the implied move; review historical OTTR earnings reactions and macro stress periods before sizing. Always rebuild the position from current OTTR chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on OTTR?
- A covered call on OTTR is the covered call strategy applied to OTTR (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 OTTR stock at $93.21 on the most recent close, the strikes shown on this page are snapped to the nearest listed OTTR chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are OTTR 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 OTTR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 287.70%), 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 OTTR covered call?
- The breakeven for the OTTR 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 OTTR market-implied 1-standard-deviation expected move in the same options snapshot is approximately 5.00%; 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 OTTR?
- Covered calls on OTTR are an income strategy run on existing OTTR 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 OTTR implied volatility affect this covered call?
- OTTR ATM IV is at 287.70% with IV rank near 57.12%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.