UHS Covered Call Strategy
UHS (Universal Health Services, Inc.), in the Healthcare sector, (Medical - Care Facilities industry), listed on NYSE.
Universal Health Services, Inc. (UHS), operating through its various divisions, is a healthcare entity that both owns and manages a network of acute care hospitals, along with outpatient and specialized behavioral health treatment centers. Its business operations are strategically bifurcated into two main segments: Acute Care Hospital Services and Behavioral Health Care Services. The hospitals under its management provide a comprehensive spectrum of medical provisions, encompassing general and specialty surgical interventions, internal medicine, obstetrics, urgent and emergency department services, diagnostic imaging (radiology), cancer therapy (oncology), advanced diagnostic procedures, cardiac care, pediatric medicine, pharmaceutical services, and mental health support. As of a reported date of February 24, 2022, the company's significant presence included the ownership or operation of 363 inpatient facilities, complemented by 40 outpatient and other specialized sites. These facilities are distributed across 39 U.S. states, the District of Columbia, the United Kingdom, and Puerto Rico. Beyond direct patient care, UHS also extends into commercial health insurance provision and offers a variety of crucial management support functions.
UHS (Universal Health Services, Inc.) trades in the Healthcare sector, specifically Medical - Care Facilities, with a market capitalization of approximately $9.12B, a trailing P/E of 5.85, a beta of 1.08 versus the broader market, a 52-week range of 140.08-246.33, average daily share volume of 967K, a public-listing history dating back to 1981, approximately 78K full-time employees. These structural characteristics shape how UHS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.08 places UHS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 5.85 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. UHS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on UHS?
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 UHS snapshot
As of June 29, 2026, spot at $147.40, ATM IV 34.40%, IV rank 35.05%, expected move 9.86%. The covered call on UHS 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 18-day expiry.
Why this covered call structure on UHS specifically: UHS IV at 34.40% is mid-range versus its 1-year history, so the credit collected on a UHS covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 9.86% (roughly $14.54 on the underlying). The 18-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated UHS expiries trade a higher absolute premium for lower per-day decay. Position sizing on UHS should anchor to the underlying notional of $147.40 per share and to the trader's directional view on UHS stock.
UHS covered call setup
The UHS 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 UHS near $147.40, the first option leg uses a $155.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UHS chain at a 18-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 UHS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $147.40 | long |
| Sell 1 | Call | $155.00 | $1.45 |
UHS covered call risk and reward
- Net Premium / Debit
- -$14,595.00
- Max Profit (per contract)
- $905.00
- Max Loss (per contract)
- -$14,594.00
- Breakeven(s)
- $145.95
- Risk / Reward Ratio
- 0.062
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.
UHS covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UHS. 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% | -$14,594.00 |
| $32.60 | -77.9% | -$11,335.02 |
| $65.19 | -55.8% | -$8,076.03 |
| $97.78 | -33.7% | -$4,817.05 |
| $130.37 | -11.6% | -$1,558.06 |
| $162.96 | +10.6% | +$905.00 |
| $195.55 | +32.7% | +$905.00 |
| $228.14 | +54.8% | +$905.00 |
| $260.73 | +76.9% | +$905.00 |
| $293.32 | +99.0% | +$905.00 |
When traders use covered call on UHS
Covered calls on UHS are an income strategy run on existing UHS stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UHS thesis for this covered call
The market-implied 1-standard-deviation range for UHS extends from approximately $132.86 on the downside to $161.94 on the upside. A UHS covered call collects premium on an existing long UHS position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UHS will breach that level within the expiration window. Current UHS IV rank near 35.05% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on UHS should anchor more to the directional view and the expected-move geometry. As a Healthcare name, UHS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UHS-specific events.
UHS 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. UHS positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UHS alongside the broader basket even when UHS-specific fundamentals are unchanged. Short-premium structures like a covered call on UHS carry tail risk when realized volatility exceeds the implied move; review historical UHS earnings reactions and macro stress periods before sizing. Always rebuild the position from current UHS chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UHS?
- A covered call on UHS is the covered call strategy applied to UHS (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 UHS stock trading near $147.40, the strikes shown on this page are snapped to the nearest listed UHS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UHS 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 UHS covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 34.40%), the computed maximum profit is $905.00 per contract and the computed maximum loss is -$14,594.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UHS covered call?
- The breakeven for the UHS covered call priced on this page is roughly $145.95 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 UHS market-implied 1-standard-deviation expected move is approximately 9.86%; 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 UHS?
- Covered calls on UHS are an income strategy run on existing UHS 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 UHS implied volatility affect this covered call?
- UHS ATM IV is at 34.40% with IV rank near 35.05%, 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.