How are PLMR 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 PLMR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 37.90%), the computed maximum profit is $869.50 per contract and the computed maximum loss is -$12,629.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a PLMR covered call?

The breakeven for the PLMR covered call priced on this page is roughly $126.31 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 PLMR market-implied 1-standard-deviation expected move is approximately 10.87%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current PLMR implied volatility affect this covered call?

PLMR ATM IV is at 37.90% with IV rank near 32.80%, 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.

PLMR Covered Call Strategy

PLMR (Palomar Holdings, Inc.), in the Financial Services sector, (Insurance - Property & Casualty industry), listed on NASDAQ.

Palomar Holdings, Inc. functions as an insurance holding company dedicated to providing specialized property coverage for both private homeowners and businesses. Its comprehensive product range encompasses essential offerings such as residential and commercial earthquake policies, commercial all-risk protection, tailored homeowners' insurance, inland marine coverage, and Hawaii hurricane policies. Furthermore, the company extends its services to include residential and commercial flood insurance, along with other specialized financial products like assumed reinsurance, real estate error and omission (E&O) coverage, and specific solutions for real estate investors. Palomar distributes its policies through a varied network, including independent retail agents, wholesale brokers, program administrators, and collaborative agreements with other insurance carriers. The company, which was previously named GC Palomar Holdings, was founded in 2013 and maintains its corporate headquarters in La Jolla, California.

PLMR (Palomar Holdings, Inc.) trades in the Financial Services sector, specifically Insurance - Property & Casualty, with a market capitalization of approximately $3.35B, a trailing P/E of 17.03, a beta of 0.44 versus the broader market, a 52-week range of 100.81-156.55, average daily share volume of 265K, a public-listing history dating back to 2019, approximately 253 full-time employees. These structural characteristics shape how PLMR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.44 indicates PLMR has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure.

What is a covered call on PLMR?

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 PLMR snapshot

As of June 30, 2026, spot at $127.43, ATM IV 37.90%, IV rank 32.80%, expected move 10.87%. The covered call on PLMR 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 PLMR specifically: PLMR IV at 37.90% is mid-range versus its 1-year history, so the credit collected on a PLMR covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 10.87% (roughly $13.85 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 PLMR expiries trade a higher absolute premium for lower per-day decay. Position sizing on PLMR should anchor to the underlying notional of $127.43 per share and to the trader's directional view on PLMR stock.

PLMR covered call setup

The PLMR 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 PLMR near $127.43, the first option leg uses a $135.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed PLMR 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 PLMR shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$127.43	long
Sell 1	Call	$135.00	$1.13

PLMR covered call risk and reward

Net Premium / Debit: -$12,630.50
Max Profit (per contract): $869.50
Max Loss (per contract): -$12,629.50
Breakeven(s): $126.31
Risk / Reward Ratio: 0.069

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.

PLMR covered call payoff curve

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

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$12,629.50
$28.18	-77.9%	-$9,812.06
$56.36	-55.8%	-$6,994.63
$84.53	-33.7%	-$4,177.19
$112.71	-11.6%	-$1,359.75
$140.88	+10.6%	+$869.50
$169.06	+32.7%	+$869.50
$197.23	+54.8%	+$869.50
$225.40	+76.9%	+$869.50
$253.58	+99.0%	+$869.50

When traders use covered call on PLMR

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

PLMR thesis for this covered call

The market-implied 1-standard-deviation range for PLMR extends from approximately $113.58 on the downside to $141.28 on the upside. A PLMR covered call collects premium on an existing long PLMR position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether PLMR will breach that level within the expiration window. Current PLMR IV rank near 32.80% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on PLMR should anchor more to the directional view and the expected-move geometry. As a Financial Services name, PLMR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to PLMR-specific events.

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

Frequently asked questions

What is a covered call on PLMR?: A covered call on PLMR is the covered call strategy applied to PLMR (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 PLMR stock trading near $127.43, the strikes shown on this page are snapped to the nearest listed PLMR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are PLMR 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 PLMR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 37.90%), the computed maximum profit is $869.50 per contract and the computed maximum loss is -$12,629.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a PLMR covered call?: The breakeven for the PLMR covered call priced on this page is roughly $126.31 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 PLMR market-implied 1-standard-deviation expected move is approximately 10.87%; 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 PLMR?: Covered calls on PLMR are an income strategy run on existing PLMR 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 PLMR implied volatility affect this covered call?: PLMR ATM IV is at 37.90% with IV rank near 32.80%, 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.