RVMD Covered Call Strategy
RVMD (Revolution Medicines, Inc.), in the Healthcare sector, (Biotechnology industry), listed on NASDAQ.
Revolution Medicines, Inc., a clinical-stage precision oncology company, focuses on developing therapies to inhibit frontier targets in RAS-addicted cancers. The company is developing RMC-4630, an inhibitor of SHP2, which is in Phase 1/2 clinical trial for the treatment of solid tumors, such as gynecologic and colorectal cancer tumors. It also develops RMC-5845, a selective inhibitor of SOS1, a protein that converts RAS (OFF) to RAS (ON) in cells; and RMC-5552, a hyperactivated selective inhibitor of mTORC1 signaling in tumors. In addition, the company is developing RMC-6291, a mutant-selective inhibitor of KRASG12C(ON) and NRASG12C(ON); and RMC-6236, a RAS-selective inhibitor of multiple RAS(ON) variants. Further, it develops RAS(ON) Inhibitors targeting KRASG13C(ON) and KRASG12D(ON). The company has a collaboration agreement with Sanofi for the research and development of SHP2 inhibitors, including RMC-4630.
RVMD (Revolution Medicines, Inc.) trades in the Healthcare sector, specifically Biotechnology, with a market capitalization of approximately $31.88B, a beta of 1.41 versus the broader market, a 52-week range of 34-155.7, average daily share volume of 3.0M, a public-listing history dating back to 2020, approximately 616 full-time employees. These structural characteristics shape how RVMD stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.41 indicates RVMD has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a covered call on RVMD?
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 RVMD snapshot
As of May 15, 2026, spot at $145.12, ATM IV 63.90%, IV rank 31.69%, expected move 18.32%. The covered call on RVMD 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 RVMD specifically: RVMD IV at 63.90% is mid-range versus its 1-year history, so the credit collected on a RVMD covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 18.32% (roughly $26.59 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 RVMD expiries trade a higher absolute premium for lower per-day decay. Position sizing on RVMD should anchor to the underlying notional of $145.12 per share and to the trader's directional view on RVMD stock.
RVMD covered call setup
The RVMD 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 RVMD near $145.12, the first option leg uses a $150.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RVMD 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 RVMD shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $145.12 | long |
| Sell 1 | Call | $150.00 | $9.85 |
RVMD covered call risk and reward
- Net Premium / Debit
- -$13,527.00
- Max Profit (per contract)
- $1,473.00
- Max Loss (per contract)
- -$13,526.00
- Breakeven(s)
- $135.27
- Risk / Reward Ratio
- 0.109
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.
RVMD covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on RVMD. 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% | -$13,526.00 |
| $32.10 | -77.9% | -$10,317.43 |
| $64.18 | -55.8% | -$7,108.85 |
| $96.27 | -33.7% | -$3,900.28 |
| $128.35 | -11.6% | -$691.71 |
| $160.44 | +10.6% | +$1,473.00 |
| $192.52 | +32.7% | +$1,473.00 |
| $224.61 | +54.8% | +$1,473.00 |
| $256.70 | +76.9% | +$1,473.00 |
| $288.78 | +99.0% | +$1,473.00 |
When traders use covered call on RVMD
Covered calls on RVMD are an income strategy run on existing RVMD stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
RVMD thesis for this covered call
The market-implied 1-standard-deviation range for RVMD extends from approximately $118.53 on the downside to $171.71 on the upside. A RVMD covered call collects premium on an existing long RVMD position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether RVMD will breach that level within the expiration window. Current RVMD IV rank near 31.69% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on RVMD should anchor more to the directional view and the expected-move geometry. As a Healthcare name, RVMD options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RVMD-specific events.
RVMD 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. RVMD positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RVMD alongside the broader basket even when RVMD-specific fundamentals are unchanged. Short-premium structures like a covered call on RVMD carry tail risk when realized volatility exceeds the implied move; review historical RVMD earnings reactions and macro stress periods before sizing. Always rebuild the position from current RVMD chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on RVMD?
- A covered call on RVMD is the covered call strategy applied to RVMD (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 RVMD stock trading near $145.12, the strikes shown on this page are snapped to the nearest listed RVMD chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RVMD 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 RVMD covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 63.90%), the computed maximum profit is $1,473.00 per contract and the computed maximum loss is -$13,526.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RVMD covered call?
- The breakeven for the RVMD covered call priced on this page is roughly $135.27 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 RVMD market-implied 1-standard-deviation expected move is approximately 18.32%; 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 RVMD?
- Covered calls on RVMD are an income strategy run on existing RVMD 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 RVMD implied volatility affect this covered call?
- RVMD ATM IV is at 63.90% with IV rank near 31.69%, 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.