PBF Covered Call Strategy
PBF (PBF Energy Inc.), in the Energy sector, (Oil & Gas Refining & Marketing industry), listed on NYSE.
PBF Energy Inc., operating through its subsidiaries, primarily focuses on the refinement and distribution of various petroleum products. Its business is structured into two core segments: Refining and Logistics. The company's extensive product portfolio encompasses gasoline, ultra-low-sulfur diesel, heating oil, standard diesel fuel, jet fuel, lubricants, petrochemicals, and asphalt. Additionally, it provides unbranded transportation fuels, essential petrochemical feedstocks, blending components, and other petroleum derivatives. PBF Energy distributes these products across the United States, specifically targeting the Northeast, Midwest, Gulf Coast, and West Coast regions, with further market penetration into other domestic areas, Canada, and Mexico. Beyond its refining activities, the company offers a comprehensive suite of logistics services, including rail, truck, and marine terminaling, alongside pipeline transportation and storage solutions.
PBF (PBF Energy Inc.) trades in the Energy sector, specifically Oil & Gas Refining & Marketing, with a market capitalization of approximately $5.10B, a trailing P/E of 11.44, a beta of 0.12 versus the broader market, a 52-week range of 21.24-52.18, average daily share volume of 3.0M, a public-listing history dating back to 2012, approximately 4K full-time employees. These structural characteristics shape how PBF stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.12 indicates PBF has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. The trailing P/E of 11.44 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. PBF pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on PBF?
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 PBF snapshot
As of June 30, 2026, spot at $45.15, ATM IV 62.10%, IV rank 19.08%, expected move 17.80%. The covered call on PBF 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 17-day expiry.
Why this covered call structure on PBF specifically: PBF IV at 62.10% is on the cheap side of its 1-year range, which means a premium-selling PBF covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 17.80% (roughly $8.04 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PBF expiries trade a higher absolute premium for lower per-day decay. Position sizing on PBF should anchor to the underlying notional of $45.15 per share and to the trader's directional view on PBF stock.
PBF covered call setup
The PBF 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 PBF near $45.15, the first option leg uses a $47.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PBF chain at a 17-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 PBF shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $45.15 | long |
| Sell 1 | Call | $47.00 | $1.68 |
PBF covered call risk and reward
- Net Premium / Debit
- -$4,347.50
- Max Profit (per contract)
- $352.50
- Max Loss (per contract)
- -$4,346.50
- Breakeven(s)
- $43.48
- Risk / Reward Ratio
- 0.081
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.
PBF covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on PBF. 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% | -$4,346.50 |
| $9.99 | -77.9% | -$3,348.32 |
| $19.97 | -55.8% | -$2,350.14 |
| $29.96 | -33.7% | -$1,351.96 |
| $39.94 | -11.5% | -$353.78 |
| $49.92 | +10.6% | +$352.50 |
| $59.90 | +32.7% | +$352.50 |
| $69.88 | +54.8% | +$352.50 |
| $79.86 | +76.9% | +$352.50 |
| $89.85 | +99.0% | +$352.50 |
When traders use covered call on PBF
Covered calls on PBF are an income strategy run on existing PBF stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
PBF thesis for this covered call
The market-implied 1-standard-deviation range for PBF extends from approximately $37.11 on the downside to $53.19 on the upside. A PBF covered call collects premium on an existing long PBF position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether PBF will breach that level within the expiration window. Current PBF IV rank near 19.08% 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 PBF at 62.10%. As a Energy name, PBF options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PBF-specific events.
PBF 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. PBF positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PBF alongside the broader basket even when PBF-specific fundamentals are unchanged. Short-premium structures like a covered call on PBF carry tail risk when realized volatility exceeds the implied move; review historical PBF earnings reactions and macro stress periods before sizing. Always rebuild the position from current PBF chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on PBF?
- A covered call on PBF is the covered call strategy applied to PBF (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 PBF stock trading near $45.15, the strikes shown on this page are snapped to the nearest listed PBF chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PBF 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 PBF covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 62.10%), the computed maximum profit is $352.50 per contract and the computed maximum loss is -$4,346.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PBF covered call?
- The breakeven for the PBF covered call priced on this page is roughly $43.48 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 PBF market-implied 1-standard-deviation expected move is approximately 17.80%; 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 PBF?
- Covered calls on PBF are an income strategy run on existing PBF 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 PBF implied volatility affect this covered call?
- PBF ATM IV is at 62.10% with IV rank near 19.08%, 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.