UFI Covered Call Strategy
UFI (Unifi, Inc.), in the Consumer Cyclical sector, (Manufacturing - Textiles industry), listed on NYSE.
Unifi, Inc., together with its subsidiaries, engages in the manufacture and sale of recycled and synthetic products in North America, Central America, South America, Asia, and Europe. It offers polyester products, including partially oriented yarn, textured, solution and package dyed, twisted, beamed, and draw wound yarns in virgin or recycled varieties; and nylon products comprise virgin or recycled textured, solution dyed, and spandex covered yarns. The company also provides recycled solutions made from pre-consumer and post-consumer waste, such as plastic bottle flakes, polyester polymer beads, and staple fiber. It offers recycled and synthetic products primarily to yarn manufacturers, knitters, and weavers that produces yarn and fabric for the apparel, hosiery, automotive, home furnishings, industrial, medical, and other end-use markets. The company sells its products through sales force and independent sales agents under the REPREVE brand. Unifi, Inc. was incorporated in 1969 and is headquartered in Greensboro, North Carolina.
UFI (Unifi, Inc.) trades in the Consumer Cyclical sector, specifically Manufacturing - Textiles, with a market capitalization of approximately $89.2M, a beta of 0.76 versus the broader market, a 52-week range of 2.96-5.24, average daily share volume of 49K, a public-listing history dating back to 1980, approximately 3K full-time employees. These structural characteristics shape how UFI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.76 places UFI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a covered call on UFI?
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 UFI snapshot
As of June 30, 2026, spot at $4.83, ATM IV 138.80%, IV rank 31.47%, expected move 39.79%. The covered call on UFI 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 17-day expiry.
Why this covered call structure on UFI specifically: UFI IV at 138.80% is mid-range versus its 1-year history, so the credit collected on a UFI covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 39.79% (roughly $1.92 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated UFI expiries trade a higher absolute premium for lower per-day decay. Position sizing on UFI should anchor to the underlying notional of $4.83 per share and to the trader's directional view on UFI stock.
UFI covered call setup
The UFI 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 UFI near $4.83, the first option leg uses a $5.07 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UFI chain at a 17-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 UFI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $4.83 | long |
| Sell 1 | Call | $5.07 | N/A |
UFI covered call risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
UFI covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UFI. 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.
When traders use covered call on UFI
Covered calls on UFI are an income strategy run on existing UFI stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UFI thesis for this covered call
The market-implied 1-standard-deviation range for UFI extends from approximately $2.91 on the downside to $6.75 on the upside. A UFI covered call collects premium on an existing long UFI position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UFI will breach that level within the expiration window. Current UFI IV rank near 31.47% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on UFI should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, UFI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UFI-specific events.
UFI 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. UFI positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UFI alongside the broader basket even when UFI-specific fundamentals are unchanged. Short-premium structures like a covered call on UFI carry tail risk when realized volatility exceeds the implied move; review historical UFI earnings reactions and macro stress periods before sizing. Always rebuild the position from current UFI chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UFI?
- A covered call on UFI is the covered call strategy applied to UFI (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 UFI stock trading near $4.83, the strikes shown on this page are snapped to the nearest listed UFI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UFI 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 UFI covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 138.80%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UFI covered call?
- The breakeven for the UFI covered call priced on this page is no defined breakeven on the modeled curve 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 UFI market-implied 1-standard-deviation expected move is approximately 39.79%; 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 UFI?
- Covered calls on UFI are an income strategy run on existing UFI 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 UFI implied volatility affect this covered call?
- UFI ATM IV is at 138.80% with IV rank near 31.47%, 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.