STNE Covered Call Strategy
STNE (StoneCo Ltd.), in the Technology sector, (Software - Infrastructure industry), listed on NASDAQ.
StoneCo Ltd. provides financial technology solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and technology and solutions to digital merchants through sales and technical personnel and software vendors, as well as sells solutions to brick-and-mortar and digital merchants through sales team. As of December 31, 2021, the company served approximately 1,766,100 clients primarily small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands. StoneCo Ltd. operates as a subsidiary of HR Holdings, LLC.
STNE (StoneCo Ltd.) trades in the Technology sector, specifically Software - Infrastructure, with a market capitalization of approximately $2.59B, a trailing P/E of 5.58, a beta of 1.60 versus the broader market, a 52-week range of 9.66-19.95, average daily share volume of 5.6M, a public-listing history dating back to 2018, approximately 7K full-time employees. These structural characteristics shape how STNE stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.60 indicates STNE has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. The trailing P/E of 5.58 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. STNE pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on STNE?
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 STNE snapshot
As of May 15, 2026, spot at $9.61, ATM IV 50.60%, IV rank 23.70%, expected move 14.51%. The covered call on STNE 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 63-day expiry.
Why this covered call structure on STNE specifically: STNE IV at 50.60% is on the cheap side of its 1-year range, which means a premium-selling STNE covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 14.51% (roughly $1.39 on the underlying). The 63-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated STNE expiries trade a higher absolute premium for lower per-day decay. Position sizing on STNE should anchor to the underlying notional of $9.61 per share and to the trader's directional view on STNE stock.
STNE covered call setup
The STNE 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 STNE near $9.61, the first option leg uses a $10.47 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed STNE chain at a 63-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 STNE shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $9.61 | long |
| Sell 1 | Call | $10.47 | $0.50 |
STNE covered call risk and reward
- Net Premium / Debit
- -$911.00
- Max Profit (per contract)
- $136.00
- Max Loss (per contract)
- -$910.00
- Breakeven(s)
- $9.11
- Risk / Reward Ratio
- 0.149
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.
STNE covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on STNE. 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 | -99.9% | -$910.00 |
| $2.13 | -77.8% | -$697.63 |
| $4.26 | -55.7% | -$485.26 |
| $6.38 | -33.6% | -$272.88 |
| $8.50 | -11.5% | -$60.51 |
| $10.63 | +10.6% | +$136.00 |
| $12.75 | +32.7% | +$136.00 |
| $14.88 | +54.8% | +$136.00 |
| $17.00 | +76.9% | +$136.00 |
| $19.12 | +99.0% | +$136.00 |
When traders use covered call on STNE
Covered calls on STNE are an income strategy run on existing STNE stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
STNE thesis for this covered call
The market-implied 1-standard-deviation range for STNE extends from approximately $8.22 on the downside to $11.00 on the upside. A STNE covered call collects premium on an existing long STNE position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether STNE will breach that level within the expiration window. Current STNE IV rank near 23.70% 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 STNE at 50.60%. As a Technology name, STNE options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to STNE-specific events.
STNE 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. STNE positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move STNE alongside the broader basket even when STNE-specific fundamentals are unchanged. Short-premium structures like a covered call on STNE carry tail risk when realized volatility exceeds the implied move; review historical STNE earnings reactions and macro stress periods before sizing. Always rebuild the position from current STNE chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on STNE?
- A covered call on STNE is the covered call strategy applied to STNE (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 STNE stock trading near $9.61, the strikes shown on this page are snapped to the nearest listed STNE chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are STNE 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 STNE covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 50.60%), the computed maximum profit is $136.00 per contract and the computed maximum loss is -$910.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a STNE covered call?
- The breakeven for the STNE covered call priced on this page is roughly $9.11 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 STNE market-implied 1-standard-deviation expected move is approximately 14.51%; 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 STNE?
- Covered calls on STNE are an income strategy run on existing STNE 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 STNE implied volatility affect this covered call?
- STNE ATM IV is at 50.60% with IV rank near 23.70%, 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.