PAGS Covered Call Strategy

PAGS (PagSeguro Digital Ltd.), in the Industrials sector, (Specialty Business Services industry), listed on NYSE.

PagSeguro Digital Ltd., together with its subsidiaries, engages in the provision of financial and payment solutions for consumers, individual entrepreneurs, micro-merchants, and small and medium-sized companies in Brazil and internationally. It provides digital banking solutions, including deposits, top-ups, debt management services, tax collections, wire transfers, ATM withdrawals, and various online and point-of-sale (POS) payment solutions; cards, such as debit, credit, cash, and prepaid cards; and credit products comprising FGTS withdrawals, payroll loans, working capital loans, and overdraft accounts. The company offers insurance services, including account, card, home, business, health assistance, life, and credit life insurance; investment services, such as investment and portfolio advisory, financial education, brokerage, fund management, treasury, and research services; and operates Shopping PagBank, a marketplace for various brands. In addition, it provides software solutions comprising PagVendas, a POS software app; ClubPag, a marketing tool that allows merchants to advertise across client base, available for POS devices; and PlugPag, a wireless solution that connects the machine to the commercial automation system, via Bluetooth technology. The company was founded in 2006 and is headquartered in São Paulo, Brazil.

PAGS (PagSeguro Digital Ltd.) trades in the Industrials sector, specifically Specialty Business Services, with a market capitalization of approximately $2.52B, a trailing P/E of 5.91, a beta of 1.28 versus the broader market, a 52-week range of 8.26-12.32, average daily share volume of 3.4M, a public-listing history dating back to 2018, approximately 7K full-time employees. These structural characteristics shape how PAGS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.28 places PAGS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 5.91 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. PAGS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on PAGS?

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.

PAGS snapshot

As of August 14, 2026, spot at $8.70, ATM IV 44.30%, IV rank 9.18%, expected move 12.70%. The covered call on PAGS 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 PAGS specifically: PAGS IV at 44.30% is on the cheap side of its 1-year range, which means a premium-selling PAGS covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 12.70% (roughly $1.10 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 PAGS expiries trade a higher absolute premium for lower per-day decay. Position sizing on PAGS should anchor to the underlying notional of $8.70 per share and to the trader's directional view on PAGS stock.

PAGS covered call setup

The PAGS 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 PAGS at $8.70 on that close, the first option leg uses a $9.14 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PAGS 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 PAGS shares for the stock leg in covered calls and collars).

ActionTypeStrike / BasisPremium (est)
Buy 100 sharesStock$8.70long
Sell 1Call$9.14N/A

PAGS 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.

PAGS covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on PAGS. 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 PAGS

Covered calls on PAGS are an income strategy run on existing PAGS stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.

PAGS thesis for this covered call

The market-implied 1-standard-deviation range for PAGS extends from approximately $7.60 on the downside to $9.80 on the upside. A PAGS covered call collects premium on an existing long PAGS position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether PAGS will breach that level within the expiration window. Current PAGS IV rank near 9.18% 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 PAGS at 44.30%. As a Industrials name, PAGS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PAGS-specific events.

PAGS 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. PAGS positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PAGS alongside the broader basket even when PAGS-specific fundamentals are unchanged. Short-premium structures like a covered call on PAGS carry tail risk when realized volatility exceeds the implied move; review historical PAGS earnings reactions and macro stress periods before sizing. Always rebuild the position from current PAGS chain quotes before placing a trade.

Frequently asked questions

What is a covered call on PAGS?
A covered call on PAGS is the covered call strategy applied to PAGS (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 PAGS stock at $8.70 on the most recent close, the strikes shown on this page are snapped to the nearest listed PAGS chain strike and the premiums come straight from that session's bid/ask midpoint.
How are PAGS 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 PAGS covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 44.30%), 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 PAGS covered call?
The breakeven for the PAGS 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 PAGS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 12.70%; 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 PAGS?
Covered calls on PAGS are an income strategy run on existing PAGS 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 PAGS implied volatility affect this covered call?
PAGS ATM IV is at 44.30% with IV rank near 9.18%, 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.

Related PAGS analysis