How are SBUX 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 SBUX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 28.37%), the computed maximum profit is $679.50 per contract and the computed maximum loss is -$10,519.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a SBUX covered call?

The breakeven for the SBUX covered call priced on this page is roughly $105.21 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 SBUX market-implied 1-standard-deviation expected move is approximately 8.13%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current SBUX implied volatility affect this covered call?

SBUX ATM IV is at 28.37% with IV rank near 12.16%, 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.

SBUX Covered Call Strategy

SBUX (Starbucks Corporation), in the Consumer Cyclical sector, (Restaurants industry), listed on NASDAQ.

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks, Teavana, Seattle's Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi brands. As of October 3, 2021, it operated 16,826 company-operated and licensed stores in North America; and 17,007 company-operated and licensed stores internationally.

SBUX (Starbucks Corporation) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $120.75B, a trailing P/E of 80.72, a beta of 1.01 versus the broader market, a 52-week range of 77.99-108.05, average daily share volume of 7.7M, a public-listing history dating back to 1992, approximately 361K full-time employees. These structural characteristics shape how SBUX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.01 places SBUX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 80.72 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. SBUX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on SBUX?

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 SBUX snapshot

As of May 15, 2026, spot at $106.53, ATM IV 28.37%, IV rank 12.16%, expected move 8.13%. The covered call on SBUX 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 SBUX specifically: SBUX IV at 28.37% is on the cheap side of its 1-year range, which means a premium-selling SBUX covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 8.13% (roughly $8.67 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 SBUX expiries trade a higher absolute premium for lower per-day decay. Position sizing on SBUX should anchor to the underlying notional of $106.53 per share and to the trader's directional view on SBUX stock.

SBUX covered call setup

The SBUX 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 SBUX near $106.53, the first option leg uses a $112.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed SBUX 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 SBUX shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$106.53	long
Sell 1	Call	$112.00	$1.33

SBUX covered call risk and reward

Net Premium / Debit: -$10,520.50
Max Profit (per contract): $679.50
Max Loss (per contract): -$10,519.50
Breakeven(s): $105.21
Risk / Reward Ratio: 0.065

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.

SBUX covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on SBUX. 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%	-$10,519.50
$23.56	-77.9%	-$8,164.17
$47.12	-55.8%	-$5,808.85
$70.67	-33.7%	-$3,453.52
$94.22	-11.6%	-$1,098.19
$117.78	+10.6%	+$679.50
$141.33	+32.7%	+$679.50
$164.88	+54.8%	+$679.50
$188.44	+76.9%	+$679.50
$211.99	+99.0%	+$679.50

When traders use covered call on SBUX

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

SBUX thesis for this covered call

The market-implied 1-standard-deviation range for SBUX extends from approximately $97.86 on the downside to $115.20 on the upside. A SBUX covered call collects premium on an existing long SBUX position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether SBUX will breach that level within the expiration window. Current SBUX IV rank near 12.16% 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 SBUX at 28.37%. As a Consumer Cyclical name, SBUX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SBUX-specific events.

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

Frequently asked questions

What is a covered call on SBUX?: A covered call on SBUX is the covered call strategy applied to SBUX (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 SBUX stock trading near $106.53, the strikes shown on this page are snapped to the nearest listed SBUX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are SBUX 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 SBUX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 28.37%), the computed maximum profit is $679.50 per contract and the computed maximum loss is -$10,519.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a SBUX covered call?: The breakeven for the SBUX covered call priced on this page is roughly $105.21 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 SBUX market-implied 1-standard-deviation expected move is approximately 8.13%; 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 SBUX?: Covered calls on SBUX are an income strategy run on existing SBUX 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 SBUX implied volatility affect this covered call?: SBUX ATM IV is at 28.37% with IV rank near 12.16%, 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.