How are UPS 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 UPS covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 22.13%), the computed maximum profit is $585.50 per contract and the computed maximum loss is -$10,413.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a UPS covered call?

The breakeven for the UPS covered call priced on this page is roughly $104.15 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The UPS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.35%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current UPS implied volatility affect this covered call?

UPS ATM IV is at 22.13% with IV rank near 1.17%, 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.

UPS Covered Call Strategy

UPS (United Parcel Service, Inc.), in the Industrials sector, (Integrated Freight & Logistics industry), listed on NYSE.

United Parcel Service, Inc., a package delivery and logistics provider, offers transportation and delivery services. It operates through two segments, U.S. Domestic Package and International Package. The U.S. Domestic Package segment offers time-definite delivery services for express letters, documents, packages and palletized freight through air and ground services. The International Package segment provides small package operations in Europe, the Middle East and Africa, Canada and Latin America, and Asia.

UPS (United Parcel Service, Inc.) trades in the Industrials sector, specifically Integrated Freight & Logistics, with a market capitalization of approximately $88.78B, a trailing P/E of 19.44, a beta of 1.04 versus the broader market, a 52-week range of 82-122.41, average daily share volume of 5.5M, a public-listing history dating back to 1999, approximately 460K full-time employees. These structural characteristics shape how UPS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 1.04 places UPS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. UPS pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on UPS?

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.

UPS snapshot

As of August 14, 2026, spot at $104.75, ATM IV 22.13%, IV rank 1.17%, expected move 6.35%. The covered call on UPS below is built from the August 14, 2026 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 UPS specifically: UPS IV at 22.13% is on the cheap side of its 1-year range, which means a premium-selling UPS covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 6.35% (roughly $6.65 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 UPS expiries trade a higher absolute premium for lower per-day decay. Position sizing on UPS should anchor to the underlying notional of $104.75 per share and to the trader's directional view on UPS stock.

UPS covered call setup

The UPS covered call below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With UPS at $104.75 on that close, the first option leg uses a $110.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed UPS 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 UPS shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$104.75	long
Sell 1	Call	$110.00	$0.61

UPS covered call risk and reward

Net Premium / Debit: -$10,414.50
Max Profit (per contract): $585.50
Max Loss (per contract): -$10,413.50
Breakeven(s): $104.15
Risk / Reward Ratio: 0.056

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.

UPS covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on UPS. 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.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$10,413.50
$23.17	-77.9%	-$8,097.53
$46.33	-55.8%	-$5,781.56
$69.49	-33.7%	-$3,465.59
$92.65	-11.6%	-$1,149.62
$115.81	+10.6%	+$585.50
$138.97	+32.7%	+$585.50
$162.13	+54.8%	+$585.50
$185.29	+76.9%	+$585.50
$208.45	+99.0%	+$585.50

When traders use covered call on UPS

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

UPS thesis for this covered call

The market-implied 1-standard-deviation range for UPS extends from approximately $98.10 on the downside to $111.40 on the upside. A UPS covered call collects premium on an existing long UPS position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether UPS will breach that level within the expiration window. Current UPS IV rank near 1.17% 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 UPS at 22.13%. As a Industrials name, UPS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to UPS-specific events.

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

Frequently asked questions

What is a covered call on UPS?: A covered call on UPS is the covered call strategy applied to UPS (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 UPS stock at $104.75 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed UPS chain strike and the premiums come straight from that session's bid/ask midpoint.
How are UPS 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 UPS covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 22.13%), the computed maximum profit is $585.50 per contract and the computed maximum loss is -$10,413.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a UPS covered call?: The breakeven for the UPS covered call priced on this page is roughly $104.15 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The UPS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 6.35%; 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 UPS?: Covered calls on UPS are an income strategy run on existing UPS 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 UPS implied volatility affect this covered call?: UPS ATM IV is at 22.13% with IV rank near 1.17%, 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.