RSG Covered Call Strategy
RSG (Republic Services, Inc.), in the Industrials sector, (Waste Management industry), listed on NYSE.
Republic Services, Inc., together with its subsidiaries, offers environmental services in the United States. The company offers collection and processing of recyclable materials, collection, transfer and disposal of non-hazardous solid waste, and other environmental solutions. Its collection services include curbside collection of material for transport to transfer stations, landfills, or recycling processing centers; supply of recycling and waste containers; and renting of compactors. In addition, the company engages in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; and provision of landfill and transfer services. Further, it offers disposal of non-hazardous solid and liquid material and in-plant services, such as transportation and logistics. It serves small-container, large-container, and residential customers.
RSG (Republic Services, Inc.) trades in the Industrials sector, specifically Waste Management, with a market capitalization of approximately $62.66B, a trailing P/E of 29.02, a beta of 0.44 versus the broader market, a 52-week range of 196.41-258.75, average daily share volume of 1.5M, a public-listing history dating back to 1998, approximately 42K full-time employees. These structural characteristics shape how RSG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.44 indicates RSG has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. RSG pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on RSG?
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 RSG snapshot
As of May 15, 2026, spot at $208.01, ATM IV 19.30%, IV rank 1.35%, expected move 5.53%. The covered call on RSG 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 RSG specifically: RSG IV at 19.30% is on the cheap side of its 1-year range, which means a premium-selling RSG covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 5.53% (roughly $11.51 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 RSG expiries trade a higher absolute premium for lower per-day decay. Position sizing on RSG should anchor to the underlying notional of $208.01 per share and to the trader's directional view on RSG stock.
RSG covered call setup
The RSG 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 RSG near $208.01, the first option leg uses a $220.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RSG 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 RSG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $208.01 | long |
| Sell 1 | Call | $220.00 | $1.23 |
RSG covered call risk and reward
- Net Premium / Debit
- -$20,678.50
- Max Profit (per contract)
- $1,321.50
- Max Loss (per contract)
- -$20,677.50
- Breakeven(s)
- $206.79
- Risk / Reward Ratio
- 0.064
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.
RSG covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on RSG. 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% | -$20,677.50 |
| $46.00 | -77.9% | -$16,078.39 |
| $91.99 | -55.8% | -$11,479.29 |
| $137.98 | -33.7% | -$6,880.18 |
| $183.97 | -11.6% | -$2,281.08 |
| $229.97 | +10.6% | +$1,321.50 |
| $275.96 | +32.7% | +$1,321.50 |
| $321.95 | +54.8% | +$1,321.50 |
| $367.94 | +76.9% | +$1,321.50 |
| $413.93 | +99.0% | +$1,321.50 |
When traders use covered call on RSG
Covered calls on RSG are an income strategy run on existing RSG stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
RSG thesis for this covered call
The market-implied 1-standard-deviation range for RSG extends from approximately $196.50 on the downside to $219.52 on the upside. A RSG covered call collects premium on an existing long RSG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether RSG will breach that level within the expiration window. Current RSG IV rank near 1.35% 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 RSG at 19.30%. As a Industrials name, RSG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RSG-specific events.
RSG 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. RSG positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RSG alongside the broader basket even when RSG-specific fundamentals are unchanged. Short-premium structures like a covered call on RSG carry tail risk when realized volatility exceeds the implied move; review historical RSG earnings reactions and macro stress periods before sizing. Always rebuild the position from current RSG chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on RSG?
- A covered call on RSG is the covered call strategy applied to RSG (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 RSG stock trading near $208.01, the strikes shown on this page are snapped to the nearest listed RSG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RSG 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 RSG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 19.30%), the computed maximum profit is $1,321.50 per contract and the computed maximum loss is -$20,677.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RSG covered call?
- The breakeven for the RSG covered call priced on this page is roughly $206.79 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 RSG market-implied 1-standard-deviation expected move is approximately 5.53%; 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 RSG?
- Covered calls on RSG are an income strategy run on existing RSG 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 RSG implied volatility affect this covered call?
- RSG ATM IV is at 19.30% with IV rank near 1.35%, 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.