PCAR Covered Call Strategy
PCAR (PACCAR Inc), in the Industrials sector, (Agricultural - Machinery industry), listed on NASDAQ.
PACCAR Inc designs, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States, Europe, Mexico, South America, Australia, and internationally. It operates through three segments: Truck, Parts, and Financial Services. The Truck segment designs, manufactures, and distributes trucks for the over-the-road and off-highway hauling of commercial and consumer goods. It sells its trucks through a network of independent dealers under the Kenworth, Peterbilt, and DAF nameplates. The Parts segment distributes aftermarket parts for trucks and related commercial vehicles. The Financial Services segment conducts full-service leasing operations under the PacLease trade name, as well as provides finance and leasing products and services to customers and dealers.
PCAR (PACCAR Inc) trades in the Industrials sector, specifically Agricultural - Machinery, with a market capitalization of approximately $58.83B, a trailing P/E of 23.78, a beta of 1.03 versus the broader market, a 52-week range of 90.05-131.88, average daily share volume of 2.9M, a public-listing history dating back to 1980, approximately 30K full-time employees. These structural characteristics shape how PCAR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.03 places PCAR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. PCAR pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on PCAR?
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 PCAR snapshot
As of May 15, 2026, spot at $110.13, ATM IV 27.80%, IV rank 42.06%, expected move 7.97%. The covered call on PCAR 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 PCAR specifically: PCAR IV at 27.80% is mid-range versus its 1-year history, so the credit collected on a PCAR covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 7.97% (roughly $8.78 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 PCAR expiries trade a higher absolute premium for lower per-day decay. Position sizing on PCAR should anchor to the underlying notional of $110.13 per share and to the trader's directional view on PCAR stock.
PCAR covered call setup
The PCAR 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 PCAR near $110.13, the first option leg uses a $115.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PCAR 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 PCAR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $110.13 | long |
| Sell 1 | Call | $115.00 | $1.90 |
PCAR covered call risk and reward
- Net Premium / Debit
- -$10,823.00
- Max Profit (per contract)
- $677.00
- Max Loss (per contract)
- -$10,822.00
- Breakeven(s)
- $108.23
- Risk / Reward Ratio
- 0.063
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.
PCAR covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on PCAR. 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% | -$10,822.00 |
| $24.36 | -77.9% | -$8,387.08 |
| $48.71 | -55.8% | -$5,952.15 |
| $73.06 | -33.7% | -$3,517.23 |
| $97.41 | -11.6% | -$1,082.30 |
| $121.76 | +10.6% | +$677.00 |
| $146.11 | +32.7% | +$677.00 |
| $170.45 | +54.8% | +$677.00 |
| $194.80 | +76.9% | +$677.00 |
| $219.15 | +99.0% | +$677.00 |
When traders use covered call on PCAR
Covered calls on PCAR are an income strategy run on existing PCAR stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
PCAR thesis for this covered call
The market-implied 1-standard-deviation range for PCAR extends from approximately $101.35 on the downside to $118.91 on the upside. A PCAR covered call collects premium on an existing long PCAR position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether PCAR will breach that level within the expiration window. Current PCAR IV rank near 42.06% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on PCAR should anchor more to the directional view and the expected-move geometry. As a Industrials name, PCAR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PCAR-specific events.
PCAR 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. PCAR positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move PCAR alongside the broader basket even when PCAR-specific fundamentals are unchanged. Short-premium structures like a covered call on PCAR carry tail risk when realized volatility exceeds the implied move; review historical PCAR earnings reactions and macro stress periods before sizing. Always rebuild the position from current PCAR chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on PCAR?
- A covered call on PCAR is the covered call strategy applied to PCAR (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 PCAR stock trading near $110.13, the strikes shown on this page are snapped to the nearest listed PCAR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are PCAR 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 PCAR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 27.80%), the computed maximum profit is $677.00 per contract and the computed maximum loss is -$10,822.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a PCAR covered call?
- The breakeven for the PCAR covered call priced on this page is roughly $108.23 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 PCAR market-implied 1-standard-deviation expected move is approximately 7.97%; 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 PCAR?
- Covered calls on PCAR are an income strategy run on existing PCAR 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 PCAR implied volatility affect this covered call?
- PCAR ATM IV is at 27.80% with IV rank near 42.06%, 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.