How are STX 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 STX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 79.91%), the computed maximum profit is $9,667.00 per contract and the computed maximum loss is -$74,332.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a STX covered call?

The breakeven for the STX covered call priced on this page is roughly $743.33 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 STX market-implied 1-standard-deviation expected move is approximately 22.91%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current STX implied volatility affect this covered call?

STX ATM IV is at 79.91% with IV rank near 87.83%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

STX Covered Call Strategy

STX (Seagate Technology Holdings plc), in the Technology sector, (Computer Hardware industry), listed on NASDAQ.

Seagate Technology Holdings plc provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally. It provides mass capacity storage products, including enterprise nearline hard disk drives (HDDs), enterprise nearline solid state drives (SSDs), enterprise nearline systems, video and image HDDs, and network-attached storage drives. The company also offers legacy applications comprising Mission Critical HDDs and SSDs; external storage solutions under the Seagate Ultra Touch, One Touch, and Expansion product lines, as well as under the LaCie brand name; desktop drives; notebook drives, DVR HDDs, and gaming SSDs. In addition, it provides Lyve edge-to-cloud mass capacity platform. The company sells its products primarily to OEMs, distributors, and retailers. Seagate Technology Holdings plc was founded in 1978 and is based in Dublin, Ireland.

STX (Seagate Technology Holdings plc) trades in the Technology sector, specifically Computer Hardware, with a market capitalization of approximately $183.27B, a trailing P/E of 75.96, a beta of 2.01 versus the broader market, a 52-week range of 103.73-841.31, average daily share volume of 4.0M, a public-listing history dating back to 2002, approximately 30K full-time employees. These structural characteristics shape how STX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 2.01 indicates STX 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 75.96 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. STX pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on STX?

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 STX snapshot

As of May 15, 2026, spot at $797.78, ATM IV 79.91%, IV rank 87.83%, expected move 22.91%. The covered call on STX 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 STX specifically: STX IV at 79.91% is rich versus its 1-year range, which favors premium-selling structures like a STX covered call, with a market-implied 1-standard-deviation move of approximately 22.91% (roughly $182.78 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 STX expiries trade a higher absolute premium for lower per-day decay. Position sizing on STX should anchor to the underlying notional of $797.78 per share and to the trader's directional view on STX stock.

STX covered call setup

The STX 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 STX near $797.78, the first option leg uses a $840.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed STX 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 STX shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$797.78	long
Sell 1	Call	$840.00	$54.45

STX covered call risk and reward

Net Premium / Debit: -$74,333.00
Max Profit (per contract): $9,667.00
Max Loss (per contract): -$74,332.00
Breakeven(s): $743.33
Risk / Reward Ratio: 0.130

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.

STX covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on STX. 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%	-$74,332.00
$176.40	-77.9%	-$56,692.75
$352.79	-55.8%	-$39,053.51
$529.19	-33.7%	-$21,414.26
$705.58	-11.6%	-$3,775.02
$881.97	+10.6%	+$9,667.00
$1,058.36	+32.7%	+$9,667.00
$1,234.76	+54.8%	+$9,667.00
$1,411.15	+76.9%	+$9,667.00
$1,587.54	+99.0%	+$9,667.00

When traders use covered call on STX

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

STX thesis for this covered call

The market-implied 1-standard-deviation range for STX extends from approximately $615.00 on the downside to $980.56 on the upside. A STX covered call collects premium on an existing long STX position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether STX will breach that level within the expiration window. Current STX IV rank near 87.83% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on STX at 79.91%. As a Technology name, STX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to STX-specific events.

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

Frequently asked questions

What is a covered call on STX?: A covered call on STX is the covered call strategy applied to STX (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 STX stock trading near $797.78, the strikes shown on this page are snapped to the nearest listed STX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are STX 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 STX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 79.91%), the computed maximum profit is $9,667.00 per contract and the computed maximum loss is -$74,332.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a STX covered call?: The breakeven for the STX covered call priced on this page is roughly $743.33 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 STX market-implied 1-standard-deviation expected move is approximately 22.91%; 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 STX?: Covered calls on STX are an income strategy run on existing STX 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 STX implied volatility affect this covered call?: STX ATM IV is at 79.91% with IV rank near 87.83%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.