How are STZ 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 STZ covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 29.88%), the computed maximum profit is $987.50 per contract and the computed maximum loss is -$14,011.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a STZ covered call?

The breakeven for the STZ covered call priced on this page is roughly $140.13 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 STZ market-implied 1-standard-deviation expected move is approximately 8.57%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current STZ implied volatility affect this covered call?

STZ ATM IV is at 29.88% with IV rank near 37.54%, 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.

STZ Covered Call Strategy

STZ (Constellation Brands, Inc.), in the Consumer Defensive sector, (Beverages - Wineries & Distilleries industry), listed on NYSE.

Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. It provides beer primarily under the Corona Extra, Corona Premier, Corona Familiar, Corona Light, Corona Refresca, Corona Hard Seltzer, Modelo Especial, Modelo Negra, Modelo Chelada, Pacifico, and Victoria brands. The company offers wine under the 7 Moons, Cook's California Champagne, Cooper & Thief, Crafters Union, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, The Dreaming Tree, Charles Smith, The Prisoner Wine Company, Robert Mondavi, My Favorite Neighbor, and Schrader; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson's Green Brier, and SVEDKA brands. It provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is headquartered in Victor, New York.

STZ (Constellation Brands, Inc.) trades in the Consumer Defensive sector, specifically Beverages - Wineries & Distilleries, with a market capitalization of approximately $24.19B, a trailing P/E of 14.45, a beta of 0.42 versus the broader market, a 52-week range of 126.45-196.91, average daily share volume of 2.0M, a public-listing history dating back to 1992, approximately 11K full-time employees. These structural characteristics shape how STZ stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.42 indicates STZ has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. STZ pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on STZ?

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 STZ snapshot

As of May 15, 2026, spot at $142.15, ATM IV 29.88%, IV rank 37.54%, expected move 8.57%. The covered call on STZ 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 STZ specifically: STZ IV at 29.88% is mid-range versus its 1-year history, so the credit collected on a STZ covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 8.57% (roughly $12.18 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 STZ expiries trade a higher absolute premium for lower per-day decay. Position sizing on STZ should anchor to the underlying notional of $142.15 per share and to the trader's directional view on STZ stock.

STZ covered call setup

The STZ 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 STZ near $142.15, 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 STZ 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 STZ shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$142.15	long
Sell 1	Call	$150.00	$2.03

STZ covered call risk and reward

Net Premium / Debit: -$14,012.50
Max Profit (per contract): $987.50
Max Loss (per contract): -$14,011.50
Breakeven(s): $140.13
Risk / Reward Ratio: 0.070

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.

STZ covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on STZ. 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%	-$14,011.50
$31.44	-77.9%	-$10,868.60
$62.87	-55.8%	-$7,725.69
$94.30	-33.7%	-$4,582.79
$125.73	-11.6%	-$1,439.88
$157.16	+10.6%	+$987.50
$188.58	+32.7%	+$987.50
$220.01	+54.8%	+$987.50
$251.44	+76.9%	+$987.50
$282.87	+99.0%	+$987.50

When traders use covered call on STZ

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

STZ thesis for this covered call

The market-implied 1-standard-deviation range for STZ extends from approximately $129.97 on the downside to $154.33 on the upside. A STZ covered call collects premium on an existing long STZ position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether STZ will breach that level within the expiration window. Current STZ IV rank near 37.54% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on STZ should anchor more to the directional view and the expected-move geometry. As a Consumer Defensive name, STZ options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to STZ-specific events.

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

Frequently asked questions

What is a covered call on STZ?: A covered call on STZ is the covered call strategy applied to STZ (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 STZ stock trading near $142.15, the strikes shown on this page are snapped to the nearest listed STZ chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are STZ 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 STZ covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 29.88%), the computed maximum profit is $987.50 per contract and the computed maximum loss is -$14,011.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a STZ covered call?: The breakeven for the STZ covered call priced on this page is roughly $140.13 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 STZ market-implied 1-standard-deviation expected move is approximately 8.57%; 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 STZ?: Covered calls on STZ are an income strategy run on existing STZ 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 STZ implied volatility affect this covered call?: STZ ATM IV is at 29.88% with IV rank near 37.54%, 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.