XLP Covered Call
Every out-of-the-money XLP call expiring Oct 23, 2026, priced from the settled chain: what it pays, what it yields, and where the trade stops making money. The richest right now is the $86.00 strike at 0.6% over 36 days.
Open interest and pricing as of the close on 2026-09-16. Recomputed every morning before the open.
XLP covered call candidates — Oct 23, 2026, 36 days out
Strikes are picked by distance from the $83.33 share price, not by delta — the published chain carries premiums and open interest, not greeks, and inventing a delta here would be inventing data. Premium is the bid/ask midpoint where both sides quote, otherwise the last trade. The chain artifact publishes the six nearest expirations, so this is the longest one listed — 36 days out. Annualising anything shorter than a week says more about compounding arithmetic than about the trade, so those cells stay blank.
| Strike | % OTM | Premium | Yield | Annualised | Break-even | If assigned | OI |
|---|---|---|---|---|---|---|---|
| $86.00 | 3.2% | $0.47 | 0.6% | 5.7% | $82.86 | 3.8% | 20 |
| $87.50 | 5.0% | $0.44 | 0.5% | 5.3% | $82.90 | 5.5% | 205 |
| $91.00 | 9.2% | $0.08 | 0.1% | 1.0% | $83.25 | 9.3% | 1 |
What the $86.00 call pays at expiration
One illustrative strike — the richest premium in the table — against 100 shares bought at $83.33. Profit caps at $314.00 if XLP finishes above $86.00; below $82.86 the premium stops covering the loss on the stock.
| Stock at expiration | Profit / loss per share | On 100 shares |
|---|---|---|
| $62.50 | $-20.36 | $-2,036.25 |
| $67.71 | $-15.15 | $-1,515.44 |
| $72.91 | $-9.95 | $-994.63 |
| $78.12 | $-4.74 | $-473.81 |
| $83.33 | +$0.47 | +$47.00 |
| $88.54 | +$3.14 | +$314.00 |
| $93.75 | +$3.14 | +$314.00 |
| $98.95 | +$3.14 | +$314.00 |
| $104.16 | +$3.14 | +$314.00 |
When a covered call fits XLP
A covered call sells someone else the right to buy your shares at the strike. It pays you today and caps your upside there, so it suits a holding you are content to own flat and content to sell at the strike — not one you expect to run.
The premium is compensation for implied volatility. Rich implied volatility pays more, and usually pays more because the market expects a move; a high annualised number on a name about to report earnings is a warning as often as an opportunity. Check the XLP expected move and the open-interest walls before assuming the strike is far enough away.
Full mechanics, assignment and rolling are in the covered call guide; to model a different strike or a multi-leg version, open the profit calculator with XLP loaded.
Questions
- What does a XLP covered call pay right now?
- The $86.00 call expiring Oct 23, 2026 (36 days out) collects $0.47 per share, 0.6% of the $83.33 share price, or 5.7% annualised if you repeat it.
- What is the break-even on a XLP covered call?
- Selling the $86.00 call against stock bought at $83.33 breaks even at $82.86 — the share price less the premium. Below that the premium no longer covers the loss on the shares.
- What happens if XLP closes above the strike?
- The shares are called away at $86.00. Total return is 3.8%: the premium plus the move from $83.33 up to the strike. Gains above the strike belong to the buyer.
More on XLP
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Educational, not investment advice. Options involve risk. Open interest is reported with a one-session lag by OCC, so these levels describe positioning as of the last settled session, not live intraday flow.