How are ULTA 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 ULTA covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 51.36%), the computed maximum profit is $4,488.00 per contract and the computed maximum loss is -$47,511.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a ULTA covered call?

The breakeven for the ULTA covered call priced on this page is roughly $475.12 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 ULTA market-implied 1-standard-deviation expected move is approximately 14.72%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current ULTA implied volatility affect this covered call?

ULTA ATM IV is at 51.36% with IV rank near 99.54%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.

ULTA Covered Call Strategy

ULTA (Ulta Beauty, Inc.), in the Consumer Cyclical sector, (Specialty Retail industry), listed on NASDAQ.

Ulta Beauty, Inc. operates as a retailer of beauty products in the United States. The company's stores offer cosmetics, fragrances, skincare and haircare products, bath and body products, and salon styling tools; professional hair products; salon services, including hair, skin, makeup, and brow services; and nail services. It also provides its private label products, such as the Ulta Beauty Collection branded cosmetics, skincare, and bath products, as well as Ulta Beauty branded products; and the Ulta Beauty branded gifts. As of March 10, 2022, the company operated 1,308 retail stores across 50 states. It also distributes its products through its website ulta.com; and mobile applications. The company was formerly known as Ulta Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017.

ULTA (Ulta Beauty, Inc.) trades in the Consumer Cyclical sector, specifically Specialty Retail, with a market capitalization of approximately $21.52B, a trailing P/E of 19.13, a beta of 0.89 versus the broader market, a 52-week range of 402.5-714.97, average daily share volume of 715K, a public-listing history dating back to 2007, approximately 20K full-time employees. These structural characteristics shape how ULTA stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.89 places ULTA 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 ULTA?

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 ULTA snapshot

As of May 15, 2026, spot at $493.77, ATM IV 51.36%, IV rank 99.54%, expected move 14.72%. The covered call on ULTA 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 ULTA specifically: ULTA IV at 51.36% is rich versus its 1-year range, which favors premium-selling structures like a ULTA covered call, with a market-implied 1-standard-deviation move of approximately 14.72% (roughly $72.71 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 ULTA expiries trade a higher absolute premium for lower per-day decay. Position sizing on ULTA should anchor to the underlying notional of $493.77 per share and to the trader's directional view on ULTA stock.

ULTA covered call setup

The ULTA 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 ULTA near $493.77, the first option leg uses a $520.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ULTA 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 ULTA shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$493.77	long
Sell 1	Call	$520.00	$18.65

ULTA covered call risk and reward

Net Premium / Debit: -$47,512.00
Max Profit (per contract): $4,488.00
Max Loss (per contract): -$47,511.00
Breakeven(s): $475.12
Risk / Reward Ratio: 0.094

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.

ULTA covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on ULTA. 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%	-$47,511.00
$109.18	-77.9%	-$36,593.58
$218.36	-55.8%	-$25,676.17
$327.53	-33.7%	-$14,758.75
$436.71	-11.6%	-$3,841.33
$545.88	+10.6%	+$4,488.00
$655.06	+32.7%	+$4,488.00
$764.23	+54.8%	+$4,488.00
$873.40	+76.9%	+$4,488.00
$982.58	+99.0%	+$4,488.00

When traders use covered call on ULTA

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

ULTA thesis for this covered call

The market-implied 1-standard-deviation range for ULTA extends from approximately $421.06 on the downside to $566.48 on the upside. A ULTA covered call collects premium on an existing long ULTA position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether ULTA will breach that level within the expiration window. Current ULTA IV rank near 99.54% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on ULTA at 51.36%. As a Consumer Cyclical name, ULTA options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ULTA-specific events.

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

Frequently asked questions

What is a covered call on ULTA?: A covered call on ULTA is the covered call strategy applied to ULTA (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 ULTA stock trading near $493.77, the strikes shown on this page are snapped to the nearest listed ULTA chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are ULTA 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 ULTA covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 51.36%), the computed maximum profit is $4,488.00 per contract and the computed maximum loss is -$47,511.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a ULTA covered call?: The breakeven for the ULTA covered call priced on this page is roughly $475.12 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 ULTA market-implied 1-standard-deviation expected move is approximately 14.72%; 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 ULTA?: Covered calls on ULTA are an income strategy run on existing ULTA 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 ULTA implied volatility affect this covered call?: ULTA ATM IV is at 51.36% with IV rank near 99.54%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.