How to sell a covered call on SOFI

The position is two pieces: long 100 SOFI shares and short one call. The short call obliges you to deliver those shares at $17.5 if the buyer exercises, and you keep the $47 premium no matter what happens. That's the whole trade — you sold the right tail of your own position.

At August 28, 2026 expiry there are three outcomes. Below $17.5 the call expires worthless and you keep both the shares and the premium. Above it the shares get called away at $17.5, for a total return of 10.2% from $16.31 including the premium. Exactly at the strike, you keep everything and a coin flip decides assignment.

Your breakeven on the combined position sits at $15.84 — spot minus the premium collected. That is the only downside protection a covered call gives you: 2.9% of cushion. It is not a hedge.

The risk in a covered call is not the call. It is the 100 shares. Max loss on the structure is $1,584 if SOFI goes to zero, versus $1,631 if you held the shares naked — the premium is the entire difference. Anyone describing this as a "low risk" trade is describing the option leg and ignoring the equity.

SOFI pays no dividend, which removes the classic early-assignment trigger — American calls on non-payers are almost never exercised early because exercising throws away the remaining extrinsic value.

Liquidity is a risk, not a convenience. The moment you most want out of a short-premium position is the moment the spread is widest, and the exit price you modelled at mid will not be available.

The accessibility is genuine and so is the arithmetic problem behind it. At a mid-teens share price, 100 shares is a couple of thousand dollars and the premium is a healthy percentage of that — but it is also a small number of dollars, and commissions and half-cent slippage eat a meaningful share of a fifteen-dollar credit. This is the one name on the list where transaction costs belong in the yield calculation.

SOFI's Aug 28 strikes are $0.5 apart near the money (3.07% of spot). On a ladder that wide, "pick the 0.30 delta strike" resolves to whichever rung happens to be closest — sometimes not close at all. 49k contracts of open interest on Aug 28 is workable around the money and thin in the wings — width costs more here than the ladder suggests. 20 strikes on that expiry — 48% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Adequate at the near strikes, thin beyond them; the bid-ask is a large fraction of the premium at every strike.

Skew is inverted: the 25-delta CALL implies 6.0% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is in contango: the back month implies 2.2% more vol than the front. Calm now, uncertainty later — which rewards selling the front month and makes the back month an expensive thing to own outright.

At 50% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $2.22 over 27 days — roughly −13.6% to +13.6%, or $14.09 to $18.53. A short-premium structure here is a bet that 13.6% over 27 days is more than SOFI will actually use. That is the thesis, stated honestly.

The SOFI-specific failure mode: Ignoring costs. A $0.02 slip on a $0.15 credit is thirteen percent of the trade, and no delta table shows you that.