RARE Covered Call Strategy

RARE (Ultragenyx Pharmaceutical Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.

Ultragenyx Pharmaceutical Inc., a biopharmaceutical company, focuses on the identification, acquisition, development, and commercialization of novel products for the treatment of rare and ultra-rare genetic diseases in North America, Europe, and internationally. Its biologic products include Crysvita (burosumab), an antibody targeting fibroblast growth factor 23 for the treatment of X-linked hypophosphatemia, as well as tumor-induced osteomalacia; Mepsevii, an enzyme replacement therapy for the treatment of children and adults with Mucopolysaccharidosis VII; Dojolvi for treating long-chain fatty acid oxidation disorders; and Evkeeza (evinacumab) for the treatment of homozygous familial hypercholesterolemia. The company's products candidatures include DTX401, an adeno-associated virus 8 (AAV8) gene therapy clinical candidate for the treatment of patients with glycogen storage disease type Ia; DTX301, an AAV8 gene therapy for the treatment of patients with ornithine transcarbamylase; UX143, a human monoclonal antibody for the treatment of osteogenesis imperfecta; GTX-102, an antisense oligonucleotide for the treatment of Angelman syndrome; UX701, for the treatment of Wilson disease; and UX053 for the treatment of glycogen storage disease type III. Ultragenyx Pharmaceutical Inc. has collaboration and license agreement with Kyowa Kirin Co., Ltd.; Saint Louis University; Baylor Research Institute; REGENXBIO Inc.; Bayer Healthcare LLC; GeneTx; Mereo; University of Pennsylvania; Arcturus Therapeutics Holdings Inc., Solid Biosciences Inc.; and Daiichi Sankyo Co., Ltd. Ultragenyx Pharmaceutical Inc. was incorporated in 2010 and is headquartered in Novato, California.

RARE (Ultragenyx Pharmaceutical Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $2.61B, a beta of 0.39 versus the broader market, a 52-week range of 18.29-42.37, average daily share volume of 2.0M, a public-listing history dating back to 2014, approximately 1K full-time employees. These structural characteristics shape how RARE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.39 indicates RARE 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 RARE?

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 RARE snapshot

As of May 15, 2026, spot at $25.07, ATM IV 45.30%, IV rank 13.83%, expected move 12.99%. The covered call on RARE 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 98-day expiry.

Why this covered call structure on RARE specifically: RARE IV at 45.30% is on the cheap side of its 1-year range, which means a premium-selling RARE covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 12.99% (roughly $3.26 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RARE expiries trade a higher absolute premium for lower per-day decay. Position sizing on RARE should anchor to the underlying notional of $25.07 per share and to the trader's directional view on RARE stock.

RARE covered call setup

The RARE 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 RARE near $25.07, the first option leg uses a $27.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RARE chain at a 98-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 RARE shares for the stock leg in covered calls and collars).

RARE covered call risk and reward

Net Premium / Debit

-$2,087.00

Max Profit (per contract)

$663.00

Max Loss (per contract)

-$2,086.00

Breakeven(s)

$20.87

Risk / Reward Ratio

0.318

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.

RARE covered call payoff curve

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

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

RARE thesis for this covered call

The market-implied 1-standard-deviation range for RARE extends from approximately $21.81 on the downside to $28.33 on the upside. A RARE covered call collects premium on an existing long RARE position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether RARE will breach that level within the expiration window. Current RARE IV rank near 13.83% 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 RARE at 45.30%. As a Healthcare name, RARE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RARE-specific events.

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

Frequently asked questions

What is a covered call on RARE?

A covered call on RARE is the covered call strategy applied to RARE (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 RARE stock trading near $25.07, the strikes shown on this page are snapped to the nearest listed RARE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.

How are RARE 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 RARE covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 45.30%), the computed maximum profit is $663.00 per contract and the computed maximum loss is -$2,086.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a RARE covered call?

The breakeven for the RARE covered call priced on this page is roughly $20.87 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 RARE market-implied 1-standard-deviation expected move is approximately 12.99%; 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 RARE?

Covered calls on RARE are an income strategy run on existing RARE 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 RARE implied volatility affect this covered call?

RARE ATM IV is at 45.30% with IV rank near 13.83%, 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 RARE analysis

• Covered Call strategy reference
• RARE options overview
• RARE P&L curve (full chain)
• RARE options chain
• RARE volatility skew