SII Covered Call Strategy
SII (Sprott Inc.), in the Financial Services sector, (Asset Management industry), listed on NYSE.
Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.
SII (Sprott Inc.) trades in the Financial Services sector, specifically Asset Management, with a market capitalization of approximately $3.68B, a trailing P/E of 47.37, a beta of 1.30 versus the broader market, a 52-week range of 54.41-169.63, average daily share volume of 225K, a public-listing history dating back to 2010, approximately 132 full-time employees. These structural characteristics shape how SII stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.30 places SII roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 47.37 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. SII pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on SII?
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 SII snapshot
As of May 15, 2026, spot at $129.11, ATM IV 51.50%, IV rank 68.41%, expected move 14.76%. The covered call on SII 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 SII specifically: SII IV at 51.50% is mid-range versus its 1-year history, so the credit collected on a SII covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 14.76% (roughly $19.06 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 SII expiries trade a higher absolute premium for lower per-day decay. Position sizing on SII should anchor to the underlying notional of $129.11 per share and to the trader's directional view on SII stock.
SII covered call setup
The SII 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 SII near $129.11, 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 SII 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 SII shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $129.11 | long |
| Sell 1 | Call | $135.00 | $5.35 |
SII covered call risk and reward
- Net Premium / Debit
- -$12,376.00
- Max Profit (per contract)
- $1,124.00
- Max Loss (per contract)
- -$12,375.00
- Breakeven(s)
- $123.76
- Risk / Reward Ratio
- 0.091
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.
SII covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on SII. 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% | -$12,375.00 |
| $28.56 | -77.9% | -$9,520.42 |
| $57.10 | -55.8% | -$6,665.83 |
| $85.65 | -33.7% | -$3,811.25 |
| $114.19 | -11.6% | -$956.67 |
| $142.74 | +10.6% | +$1,124.00 |
| $171.28 | +32.7% | +$1,124.00 |
| $199.83 | +54.8% | +$1,124.00 |
| $228.38 | +76.9% | +$1,124.00 |
| $256.92 | +99.0% | +$1,124.00 |
When traders use covered call on SII
Covered calls on SII are an income strategy run on existing SII stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
SII thesis for this covered call
The market-implied 1-standard-deviation range for SII extends from approximately $110.05 on the downside to $148.17 on the upside. A SII covered call collects premium on an existing long SII position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether SII will breach that level within the expiration window. Current SII IV rank near 68.41% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on SII should anchor more to the directional view and the expected-move geometry. As a Financial Services name, SII options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to SII-specific events.
SII 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. SII positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move SII alongside the broader basket even when SII-specific fundamentals are unchanged. Short-premium structures like a covered call on SII carry tail risk when realized volatility exceeds the implied move; review historical SII earnings reactions and macro stress periods before sizing. Always rebuild the position from current SII chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on SII?
- A covered call on SII is the covered call strategy applied to SII (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 SII stock trading near $129.11, the strikes shown on this page are snapped to the nearest listed SII chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are SII 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 SII covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 51.50%), the computed maximum profit is $1,124.00 per contract and the computed maximum loss is -$12,375.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a SII covered call?
- The breakeven for the SII covered call priced on this page is roughly $123.76 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 SII market-implied 1-standard-deviation expected move is approximately 14.76%; 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 SII?
- Covered calls on SII are an income strategy run on existing SII 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 SII implied volatility affect this covered call?
- SII ATM IV is at 51.50% with IV rank near 68.41%, 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.