OXSQ Covered Call Strategy
OXSQ (Oxford Square Capital Corp.), in the Financial Services sector, (Asset Management industry), listed on NASDAQ.
Oxford Square Capital Corp. is a business development company, operates as a closed-end, non-diversified management investment company. It is a private equity and mezzanine firm. The firm invests in both public and private companies. It invests in secured and unsecured senior debt, subordinated debt, junior subordinated debt, preferred stock, common stock and syndicated bank loans. The firm primarily invests in debt and/or equity securities of technology-related companies that operate in the computer software, Internet, information technology infrastructure and services, media, telecommunications and telecommunications equipment, semiconductors, hardware, technology-enabled services, semiconductor capital equipment, medical device technology, diversified technology, and networking systems sectors. It concentrates its investments in companies having annual revenues of less than $200 million and a market capitalization or enterprise value of less than $300 million.
OXSQ (Oxford Square Capital Corp.) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $163.7M, a beta of 0.49 versus the broader market, a 52-week range of 1.56-2.5, average daily share volume of 1.6M, a public-listing history dating back to 2003. These structural characteristics shape how OXSQ stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.49 indicates OXSQ has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. OXSQ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on OXSQ?
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 OXSQ snapshot
As of May 15, 2026, spot at $1.65, ATM IV 408.80%, IV rank 100.00%, expected move 117.20%. The covered call on OXSQ 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 OXSQ specifically: OXSQ IV at 408.80% is rich versus its 1-year range, which favors premium-selling structures like a OXSQ covered call, with a market-implied 1-standard-deviation move of approximately 117.20% (roughly $1.93 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 OXSQ expiries trade a higher absolute premium for lower per-day decay. Position sizing on OXSQ should anchor to the underlying notional of $1.65 per share and to the trader's directional view on OXSQ stock.
OXSQ covered call setup
The OXSQ 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 OXSQ near $1.65, the first option leg uses a $1.73 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed OXSQ 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 OXSQ shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $1.65 | long |
| Sell 1 | Call | $1.73 | N/A |
OXSQ 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.
OXSQ covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on OXSQ. 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 OXSQ
Covered calls on OXSQ are an income strategy run on existing OXSQ stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
OXSQ thesis for this covered call
The market-implied 1-standard-deviation range for OXSQ extends from approximately $-0.28 on the downside to $3.58 on the upside. A OXSQ covered call collects premium on an existing long OXSQ position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether OXSQ will breach that level within the expiration window. Current OXSQ IV rank near 100.00% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on OXSQ at 408.80%. As a Financial Services name, OXSQ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to OXSQ-specific events.
OXSQ 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. OXSQ positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move OXSQ alongside the broader basket even when OXSQ-specific fundamentals are unchanged. Short-premium structures like a covered call on OXSQ carry tail risk when realized volatility exceeds the implied move; review historical OXSQ earnings reactions and macro stress periods before sizing. Always rebuild the position from current OXSQ chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on OXSQ?
- A covered call on OXSQ is the covered call strategy applied to OXSQ (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 OXSQ stock trading near $1.65, the strikes shown on this page are snapped to the nearest listed OXSQ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are OXSQ 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 OXSQ covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 408.80%), 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 OXSQ covered call?
- The breakeven for the OXSQ 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 OXSQ market-implied 1-standard-deviation expected move is approximately 117.20%; 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 OXSQ?
- Covered calls on OXSQ are an income strategy run on existing OXSQ 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 OXSQ implied volatility affect this covered call?
- OXSQ ATM IV is at 408.80% with IV rank near 100.00%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.