UNM Covered Call Strategy
UNM (Unum Group), in the Financial Services sector, (Insurance - Life industry), listed on NYSE.
Unum Group, along with its various subsidiaries, specializes in delivering financial protection benefits, primarily operating across the United States, the United Kingdom, and Poland. The company's operations are organized into distinct segments: Unum US, Unum International, Colonial Life, and the Closed Block. Its extensive product portfolio encompasses group coverage, including long-term and short-term disability, life insurance, and accidental death and dismemberment. Additionally, Unum provides a range of supplemental and voluntary offerings like individual disability, various voluntary benefits, and dental and vision plans. Further offerings include policies addressing accidents, sickness, general disability, life coverage, cancer, and critical illness. Beyond these, Unum's services extend to group pension plans, individual life insurance, corporate-owned life insurance (COLI), and the management of reinsurance pools.
UNM (Unum Group) trades in the Financial Services sector, specifically Insurance - Life, with a market capitalization of approximately $14.40B, a trailing P/E of 18.92, a beta of 0.25 versus the broader market, a 52-week range of 68.28-93.22, average daily share volume of 1.4M, a public-listing history dating back to 1986, approximately 11K full-time employees. These structural characteristics shape how UNM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.25 indicates UNM has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. UNM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on UNM?
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 UNM snapshot
As of June 29, 2026, spot at $89.69, ATM IV 22.60%, IV rank 24.46%, expected move 6.48%. The covered call on UNM 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 UNM specifically: UNM IV at 22.60% is on the cheap side of its 1-year range, which means a premium-selling UNM covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 6.48% (roughly $5.81 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 UNM expiries trade a higher absolute premium for lower per-day decay. Position sizing on UNM should anchor to the underlying notional of $89.69 per share and to the trader's directional view on UNM stock.
UNM covered call setup
The UNM 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 UNM near $89.69, the first option leg uses a $95.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UNM 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 UNM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $89.69 | long |
| Sell 1 | Call | $95.00 | $0.30 |
UNM covered call risk and reward
- Net Premium / Debit
- -$8,939.00
- Max Profit (per contract)
- $561.00
- Max Loss (per contract)
- -$8,938.00
- Breakeven(s)
- $89.39
- Risk / Reward Ratio
- 0.063
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.
UNM covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on UNM. 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% | -$8,938.00 |
| $19.84 | -77.9% | -$6,955.02 |
| $39.67 | -55.8% | -$4,972.03 |
| $59.50 | -33.7% | -$2,989.05 |
| $79.33 | -11.6% | -$1,006.06 |
| $99.16 | +10.6% | +$561.00 |
| $118.99 | +32.7% | +$561.00 |
| $138.82 | +54.8% | +$561.00 |
| $158.65 | +76.9% | +$561.00 |
| $178.48 | +99.0% | +$561.00 |
When traders use covered call on UNM
Covered calls on UNM are an income strategy run on existing UNM stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
UNM thesis for this covered call
The market-implied 1-standard-deviation range for UNM extends from approximately $83.88 on the downside to $95.50 on the upside. A UNM covered call collects premium on an existing long UNM position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UNM will breach that level within the expiration window. Current UNM IV rank near 24.46% 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 UNM at 22.60%. As a Financial Services name, UNM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UNM-specific events.
UNM 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. UNM positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move UNM alongside the broader basket even when UNM-specific fundamentals are unchanged. Short-premium structures like a covered call on UNM carry tail risk when realized volatility exceeds the implied move; review historical UNM earnings reactions and macro stress periods before sizing. Always rebuild the position from current UNM chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on UNM?
- A covered call on UNM is the covered call strategy applied to UNM (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 UNM stock trading near $89.69, the strikes shown on this page are snapped to the nearest listed UNM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are UNM 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 UNM covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 22.60%), the computed maximum profit is $561.00 per contract and the computed maximum loss is -$8,938.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a UNM covered call?
- The breakeven for the UNM covered call priced on this page is roughly $89.39 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 UNM market-implied 1-standard-deviation expected move is approximately 6.48%; 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 UNM?
- Covered calls on UNM are an income strategy run on existing UNM 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 UNM implied volatility affect this covered call?
- UNM ATM IV is at 22.60% with IV rank near 24.46%, 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.