How are PHM 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 PHM covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 35.34%), the computed maximum profit is $783.00 per contract and the computed maximum loss is -$10,816.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PHM covered call?

The breakeven for the PHM covered call priced on this page is roughly $108.17 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 PHM market-implied 1-standard-deviation expected move is approximately 10.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PHM implied volatility affect this covered call?

PHM ATM IV is at 35.34% with IV rank near 44.67%, 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.

PHM Covered Call Strategy

PHM (PulteGroup, Inc.), in the Consumer Cyclical sector, (Residential Construction industry), listed on NYSE.

PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, American West, and John Wieland Homes and Neighborhoods brand names. As of December 31, 2021, it controlled 228,296 lots, of which 109,078 were owned and 119,218 were under land option agreements. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was formerly known as Pulte Homes, Inc. and changed its name to PulteGroup, Inc. in March 2010.

PHM (PulteGroup, Inc.) trades in the Consumer Cyclical sector, specifically Residential Construction, with a market capitalization of approximately $21.52B, a trailing P/E of 10.60, a beta of 1.24 versus the broader market, a 52-week range of 95.2-144.5, average daily share volume of 1.8M, a public-listing history dating back to 1980, approximately 7K full-time employees. These structural characteristics shape how PHM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.24 places PHM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 10.60 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. PHM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on PHM?

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 PHM snapshot

As of May 15, 2026, spot at $110.32, ATM IV 35.34%, IV rank 44.67%, expected move 10.13%. The covered call on PHM 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 28-day expiry.

Why this covered call structure on PHM specifically: PHM IV at 35.34% is mid-range versus its 1-year history, so the credit collected on a PHM covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 10.13% (roughly $11.18 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated PHM expiries trade a higher absolute premium for lower per-day decay. Position sizing on PHM should anchor to the underlying notional of $110.32 per share and to the trader's directional view on PHM stock.

PHM covered call setup

The PHM 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 PHM near $110.32, the first option leg uses a $116.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PHM chain at a 28-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 PHM shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$110.32	long
Sell 1	Call	$116.00	$2.15

PHM covered call risk and reward

Net Premium / Debit: -$10,817.00
Max Profit (per contract): $783.00
Max Loss (per contract): -$10,816.00
Breakeven(s): $108.17
Risk / Reward Ratio: 0.072

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.

PHM covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on PHM. 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%	-$10,816.00
$24.40	-77.9%	-$8,376.87
$48.79	-55.8%	-$5,937.75
$73.18	-33.7%	-$3,498.62
$97.58	-11.6%	-$1,059.50
$121.97	+10.6%	+$783.00
$146.36	+32.7%	+$783.00
$170.75	+54.8%	+$783.00
$195.14	+76.9%	+$783.00
$219.53	+99.0%	+$783.00

When traders use covered call on PHM

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

PHM thesis for this covered call

The market-implied 1-standard-deviation range for PHM extends from approximately $99.14 on the downside to $121.50 on the upside. A PHM covered call collects premium on an existing long PHM position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether PHM will breach that level within the expiration window. Current PHM IV rank near 44.67% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on PHM should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, PHM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PHM-specific events.

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

Frequently asked questions

What is a covered call on PHM?: A covered call on PHM is the covered call strategy applied to PHM (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 PHM stock trading near $110.32, the strikes shown on this page are snapped to the nearest listed PHM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PHM 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 PHM covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 35.34%), the computed maximum profit is $783.00 per contract and the computed maximum loss is -$10,816.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PHM covered call?: The breakeven for the PHM covered call priced on this page is roughly $108.17 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 PHM market-implied 1-standard-deviation expected move is approximately 10.13%; 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 PHM?: Covered calls on PHM are an income strategy run on existing PHM 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 PHM implied volatility affect this covered call?: PHM ATM IV is at 35.34% with IV rank near 44.67%, 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.