UFPI Covered Call Strategy
UFPI (UFP Industries, Inc.), in the Basic Materials sector, (Paper, Lumber & Forest Products industry), listed on NASDAQ.
UFP Industries, Inc., through its subsidiaries, designs, manufactures, and markets wood and wood-alternative products in North America, Europe, Asia, and Australia. It operates through Retail, Industrial, and Construction segments. The Retail segment offers preserved and unpreserved dimensional lumber; and outdoor living products, including wood and wood composite decking and related accessories, decorative lawn, garden, craft, and hobby products. This segment serves national home center retailers, and retail-oriented regional and contractor-oriented lumberyards under the ProWood, ProWood FR, Deckorators, UFP-Edge, Outdoor Essentials, Dimensions, and Handprint trademarks. The Industrial segment provides pallets, specialty crates, wooden boxes, and other containers and products that are used for packaging, shipping, and material handling applications, as well as various other protective packaging applications. The construction segment offers roof trusses, cut and shaped lumbers, plywood, oriented strand boards, and dimensional lumbers; and engineered wood components, including roof and floor trusses, wall panels, I-joists, and lumber packages, as well as distributes siding, electrical, and plumbing products to factory-built housing and recreational vehicle customers.
UFPI (UFP Industries, Inc.) trades in the Basic Materials sector, specifically Paper, Lumber & Forest Products, with a market capitalization of approximately $4.60B, a trailing P/E of 17.41, a beta of 1.30 versus the broader market, a 52-week range of 80.06-118, average daily share volume of 411K, a public-listing history dating back to 1993, approximately 15K full-time employees. These structural characteristics shape how UFPI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.30 places UFPI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. UFPI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on UFPI?
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 UFPI snapshot
As of May 15, 2026, spot at $80.25, ATM IV 34.30%, IV rank 4.30%, expected move 9.83%. The covered call on UFPI 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 UFPI specifically: UFPI IV at 34.30% is on the cheap side of its 1-year range, which means a premium-selling UFPI covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 9.83% (roughly $7.89 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 UFPI expiries trade a higher absolute premium for lower per-day decay. Position sizing on UFPI should anchor to the underlying notional of $80.25 per share and to the trader's directional view on UFPI stock.
UFPI covered call setup
The UFPI 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 UFPI near $80.25, the first option leg uses a $85.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UFPI 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 UFPI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $80.25 | long |
| Sell 1 | Call | $85.00 | $2.48 |
UFPI covered call risk and reward
- Net Premium / Debit
- -$7,777.50
- Max Profit (per contract)
- $722.50
- Max Loss (per contract)
- -$7,776.50
- Breakeven(s)
- $77.78
- Risk / Reward Ratio
- 0.093
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.
UFPI covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UFPI. 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% | -$7,776.50 |
| $17.75 | -77.9% | -$6,002.24 |
| $35.50 | -55.8% | -$4,227.98 |
| $53.24 | -33.7% | -$2,453.72 |
| $70.98 | -11.6% | -$679.45 |
| $88.72 | +10.6% | +$722.50 |
| $106.47 | +32.7% | +$722.50 |
| $124.21 | +54.8% | +$722.50 |
| $141.95 | +76.9% | +$722.50 |
| $159.69 | +99.0% | +$722.50 |
When traders use covered call on UFPI
Covered calls on UFPI are an income strategy run on existing UFPI stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UFPI thesis for this covered call
The market-implied 1-standard-deviation range for UFPI extends from approximately $72.36 on the downside to $88.14 on the upside. A UFPI covered call collects premium on an existing long UFPI position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UFPI will breach that level within the expiration window. Current UFPI IV rank near 4.30% 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 UFPI at 34.30%. As a Basic Materials name, UFPI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UFPI-specific events.
UFPI 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. UFPI positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UFPI alongside the broader basket even when UFPI-specific fundamentals are unchanged. Short-premium structures like a covered call on UFPI carry tail risk when realized volatility exceeds the implied move; review historical UFPI earnings reactions and macro stress periods before sizing. Always rebuild the position from current UFPI chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UFPI?
- A covered call on UFPI is the covered call strategy applied to UFPI (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 UFPI stock trading near $80.25, the strikes shown on this page are snapped to the nearest listed UFPI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UFPI 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 UFPI covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 34.30%), the computed maximum profit is $722.50 per contract and the computed maximum loss is -$7,776.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UFPI covered call?
- The breakeven for the UFPI covered call priced on this page is roughly $77.78 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 UFPI market-implied 1-standard-deviation expected move is approximately 9.83%; 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 UFPI?
- Covered calls on UFPI are an income strategy run on existing UFPI 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 UFPI implied volatility affect this covered call?
- UFPI ATM IV is at 34.30% with IV rank near 4.30%, 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.