VREX Covered Call Strategy
VREX (Varex Imaging Corporation), in the Healthcare sector, (Medical - Devices industry), listed on NASDAQ.
Varex Imaging Corporation (VREX) specializes in the development and production of X-ray imaging components. Its operations are divided into two primary divisions: Medical and Industrial. Within the Medical segment, Varex provides a comprehensive range of X-ray imaging components. These include essential hardware like X-ray tubes, digital detectors, and high-voltage connectors, alongside sophisticated software solutions for image processing, 3D reconstruction, and computer-aided diagnostics. The segment also supplies critical ancillary devices such as collimators, generators, and automatic exposure control mechanisms. These medical products serve a wide spectrum of applications, from general diagnostic imaging like radiography and fluoroscopy, to specialized areas such as mammography, computed tomography (CT), cardiac procedures, dental imaging, and surgical applications.
VREX (Varex Imaging Corporation) trades in the Healthcare sector, specifically Medical - Devices, with a market capitalization of approximately $776.7M, a trailing P/E of 35.15, a beta of 0.88 versus the broader market, a 52-week range of 9.09-18.63, average daily share volume of 397K, a public-listing history dating back to 2017, approximately 2K full-time employees. These structural characteristics shape how VREX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.88 places VREX roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 35.15 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a covered call on VREX?
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.
VREX snapshot
As of August 14, 2026, spot at $18.51, ATM IV 28.00%, IV rank 4.02%, expected move 8.03%. The covered call on VREX below is built from the 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 VREX specifically: VREX IV at 28.00% is on the cheap side of its 1-year range, which means a premium-selling VREX covered call collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 8.03% (roughly $1.49 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 VREX expiries trade a higher absolute premium for lower per-day decay. Position sizing on VREX should anchor to the underlying notional of $18.51 per share and to the trader's directional view on VREX stock.
VREX covered call setup
The VREX 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 VREX at $18.51 on that close, the first option leg uses a $19.44 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed VREX 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 VREX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $18.51 | long |
| Sell 1 | Call | $19.44 | N/A |
VREX covered call risk and reward
- Net Premium / Debit
- N/A
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- Unbounded
- Breakeven(s)
- None on modeled curve
- Risk / Reward Ratio
- N/A
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.
VREX covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on VREX. 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.
When traders use covered call on VREX
Covered calls on VREX are an income strategy run on existing VREX stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
VREX thesis for this covered call
The market-implied 1-standard-deviation range for VREX extends from approximately $17.02 on the downside to $20.00 on the upside. A VREX covered call collects premium on an existing long VREX position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether VREX will breach that level within the expiration window. Current VREX IV rank near 4.02% 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 VREX at 28.00%. As a Healthcare name, VREX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to VREX-specific events.
VREX 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. VREX positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move VREX alongside the broader basket even when VREX-specific fundamentals are unchanged. Short-premium structures like a covered call on VREX carry tail risk when realized volatility exceeds the implied move; review historical VREX earnings reactions and macro stress periods before sizing. Always rebuild the position from current VREX chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on VREX?
- A covered call on VREX is the covered call strategy applied to VREX (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 VREX stock at $18.51 on the most recent close, the strikes shown on this page are snapped to the nearest listed VREX chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are VREX 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 VREX covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 28.00%), the computed maximum profit is unbounded per contract and the computed maximum loss is unbounded per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a VREX covered call?
- The breakeven for the VREX covered call priced on this page is no defined breakeven on the modeled curve at expiration, derived from the 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 VREX market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.03%; 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 VREX?
- Covered calls on VREX are an income strategy run on existing VREX 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 VREX implied volatility affect this covered call?
- VREX ATM IV is at 28.00% with IV rank near 4.02%, 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.