USLM Covered Call Strategy
USLM (United States Lime & Minerals, Inc.), in the Basic Materials sector, (Construction Materials industry), listed on NASDAQ.
United States Lime & Minerals, Inc. (USLM) operates as a domestic producer and supplier of a diverse range of lime and limestone products. The company sources limestone through its open-pit quarries and an underground mine, subsequently processing it into various forms such as pulverized limestone, quicklime, hydrated lime, and lime slurry. These essential materials are distributed to a wide array of customers, including the construction sector (for roads, highways, and buildings), industrial clients (like paper and glass manufacturers), environmental applications (suchprising municipal sanitation, water treatment, and flue gas treatment), steel producers, oil and gas service companies, roof shingle manufacturers, and agricultural producers for poultry and cattle feed. Furthermore, USLM holds royalty and non-operating working interests in natural gas wells situated in the Barnett Shale Formation of Johnson County, Texas. The company was founded in 1950 and is headquartered in Dallas, Texas.
USLM (United States Lime & Minerals, Inc.) trades in the Basic Materials sector, specifically Construction Materials, with a market capitalization of approximately $3.37B, a trailing P/E of 25.06, a beta of 0.72 versus the broader market, a 52-week range of 96.27-141.44, average daily share volume of 193K, a public-listing history dating back to 1980, approximately 346 full-time employees. These structural characteristics shape how USLM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.72 places USLM roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. USLM pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a covered call on USLM?
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.
USLM snapshot
As of August 14, 2026, spot at $117.96, ATM IV 37.50%, IV rank 5.18%, expected move 10.75%. The covered call on USLM 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 35-day expiry.
Why this covered call structure on USLM specifically: USLM IV at 37.50% is on the cheap side of its 1-year range, which means a premium-selling USLM covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 10.75% (roughly $12.68 on the underlying). The 35-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated USLM expiries trade a higher absolute premium for lower per-day decay. Position sizing on USLM should anchor to the underlying notional of $117.96 per share and to the trader's directional view on USLM stock.
USLM covered call setup
The USLM 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 USLM at $117.96 on that close, the first option leg uses a $125.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed USLM chain at a 35-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 USLM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $117.96 | long |
| Sell 1 | Call | $125.00 | $2.80 |
USLM covered call risk and reward
- Net Premium / Debit
- -$11,516.00
- Max Profit (per contract)
- $984.00
- Max Loss (per contract)
- -$11,515.00
- Breakeven(s)
- $115.16
- Risk / Reward Ratio
- 0.085
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.
USLM covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on USLM. 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% | -$11,515.00 |
| $26.09 | -77.9% | -$8,906.95 |
| $52.17 | -55.8% | -$6,298.90 |
| $78.25 | -33.7% | -$3,690.85 |
| $104.33 | -11.6% | -$1,082.80 |
| $130.41 | +10.6% | +$984.00 |
| $156.49 | +32.7% | +$984.00 |
| $182.57 | +54.8% | +$984.00 |
| $208.65 | +76.9% | +$984.00 |
| $234.73 | +99.0% | +$984.00 |
When traders use covered call on USLM
Covered calls on USLM are an income strategy run on existing USLM stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
USLM thesis for this covered call
The market-implied 1-standard-deviation range for USLM extends from approximately $105.28 on the downside to $130.64 on the upside. A USLM covered call collects premium on an existing long USLM position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether USLM will breach that level within the expiration window. Current USLM IV rank near 5.18% 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 USLM at 37.50%. As a Basic Materials name, USLM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to USLM-specific events.
USLM 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. USLM positions also carry Basic Materials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move USLM alongside the broader basket even when USLM-specific fundamentals are unchanged. Short-premium structures like a covered call on USLM carry tail risk when realized volatility exceeds the implied move; review historical USLM earnings reactions and macro stress periods before sizing. Always rebuild the position from current USLM chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on USLM?
- A covered call on USLM is the covered call strategy applied to USLM (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 USLM stock at $117.96 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed USLM chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are USLM 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 USLM covered call priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 37.50%), the computed maximum profit is $984.00 per contract and the computed maximum loss is -$11,515.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a USLM covered call?
- The breakeven for the USLM covered call priced on this page is roughly $115.16 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 USLM market-implied 1-standard-deviation expected move in the same options snapshot is approximately 10.75%; 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 USLM?
- Covered calls on USLM are an income strategy run on existing USLM 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 USLM implied volatility affect this covered call?
- USLM ATM IV is at 37.50% with IV rank near 5.18%, 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.