TCBI Covered Call Strategy
TCBI (Texas Capital Bancshares, Inc.), in the Financial Services sector, (Banks - Regional industry), listed on NASDAQ.
Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. The company offers commercial banking, consumer banking, investment banking, and wealth management services. It offers business deposit products and services, including commercial checking accounts, lockbox accounts, and cash concentration accounts, as well as information, wire transfer initiation, ACH initiation, account transfer, and service integration services; and consumer deposit products, such as checking accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial loans for general corporate purposes comprising financing working capital, internal growth, acquisitions, and business insurance premiums, as well as consumer loans; loans to exploration and production companies; mortgage finance loans; commercial real estate and residential homebuilder finance loans; first and second lien loans for the purpose of purchasing or constructing 1-4 family residential dwellings, as well as home equity revolving lines of credit and loans to purchase lots for future construction of 1-4 family residential dwellings; and real estate loans originated through a small business administration program, as well as equipment finance and leasing services, and letters of credit. In addition, it offers online and mobile banking, and debit and credit card services; escrow services; personal wealth management and trust services; and depositors American Airlines AAdvantage miles. It operates in Austin, Fort Worth, Dallas, Houston, and San Antonio metropolitan areas of Texas.
TCBI (Texas Capital Bancshares, Inc.) trades in the Financial Services sector, specifically Banks - Regional, with a market capitalization of approximately $4.19B, a trailing P/E of 12.11, a beta of 0.69 versus the broader market, a 52-week range of 70-108.92, average daily share volume of 473K, a public-listing history dating back to 2003, approximately 2K full-time employees. These structural characteristics shape how TCBI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.69 indicates TCBI has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. TCBI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on TCBI?
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 TCBI snapshot
As of May 15, 2026, spot at $95.63, ATM IV 30.60%, IV rank 5.49%, expected move 8.77%. The covered call on TCBI 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 TCBI specifically: TCBI IV at 30.60% is on the cheap side of its 1-year range, which means a premium-selling TCBI covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 8.77% (roughly $8.39 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 TCBI expiries trade a higher absolute premium for lower per-day decay. Position sizing on TCBI should anchor to the underlying notional of $95.63 per share and to the trader's directional view on TCBI stock.
TCBI covered call setup
The TCBI 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 TCBI near $95.63, the first option leg uses a $100.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TCBI 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 TCBI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $95.63 | long |
| Sell 1 | Call | $100.00 | $2.18 |
TCBI covered call risk and reward
- Net Premium / Debit
- -$9,345.50
- Max Profit (per contract)
- $654.50
- Max Loss (per contract)
- -$9,344.50
- Breakeven(s)
- $93.46
- 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.
TCBI covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on TCBI. 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% | -$9,344.50 |
| $21.15 | -77.9% | -$7,230.18 |
| $42.30 | -55.8% | -$5,115.86 |
| $63.44 | -33.7% | -$3,001.54 |
| $84.58 | -11.6% | -$887.21 |
| $105.73 | +10.6% | +$654.50 |
| $126.87 | +32.7% | +$654.50 |
| $148.01 | +54.8% | +$654.50 |
| $169.16 | +76.9% | +$654.50 |
| $190.30 | +99.0% | +$654.50 |
When traders use covered call on TCBI
Covered calls on TCBI are an income strategy run on existing TCBI stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
TCBI thesis for this covered call
The market-implied 1-standard-deviation range for TCBI extends from approximately $87.24 on the downside to $104.02 on the upside. A TCBI covered call collects premium on an existing long TCBI position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether TCBI will breach that level within the expiration window. Current TCBI IV rank near 5.49% 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 TCBI at 30.60%. As a Financial Services name, TCBI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TCBI-specific events.
TCBI 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. TCBI positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TCBI alongside the broader basket even when TCBI-specific fundamentals are unchanged. Short-premium structures like a covered call on TCBI carry tail risk when realized volatility exceeds the implied move; review historical TCBI earnings reactions and macro stress periods before sizing. Always rebuild the position from current TCBI chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on TCBI?
- A covered call on TCBI is the covered call strategy applied to TCBI (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 TCBI stock trading near $95.63, the strikes shown on this page are snapped to the nearest listed TCBI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TCBI 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 TCBI covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 30.60%), the computed maximum profit is $654.50 per contract and the computed maximum loss is -$9,344.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TCBI covered call?
- The breakeven for the TCBI covered call priced on this page is roughly $93.46 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 TCBI market-implied 1-standard-deviation expected move is approximately 8.77%; 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 TCBI?
- Covered calls on TCBI are an income strategy run on existing TCBI 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 TCBI implied volatility affect this covered call?
- TCBI ATM IV is at 30.60% with IV rank near 5.49%, 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.