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ADP Covered Call Analysis: Proceed With Caution Weak · 58/100
Automatic Data Processing Inc (Technology) · $293.84 ·
Analysis generated Oct 30, 2026 ·
Data as of market close Oct 30
Quick Take
ADP is trading at $293.84 with RSI at 59 (neutral territory). Options IV is at 30% — 50% below its 30-day average of 61%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
59
IV Today
30.3%
IV vs 30d Avg
-50%
MACD
bullish
ADX
33
MFI
69
The Setup
ADP Covered Call
LONG STOCK
100 shares @ $293.84
SHORT CALL
$315 Dec '26 · $4.79/sh
Net Cost
$28,905
Max Profit
+$2,595
Break-even
$289.05
Projected P&L at Target
+$2,595
(9.0%)
P&L at Expiry
P&L Scenarios
What happens at different ADP prices by expiry:
| ADP Price | Today | Nov 16 | Dec 2 | Dec 18 (exp) |
|---|---|---|---|---|
| $235 (-20%) | -$5,400 | -$5,398 | -$5,398 | -$5,398 |
| $250 (-15%) | -$3,940 | -$3,931 | -$3,929 | -$3,929 |
| $264 (-10%) | -$2,512 | -$2,474 | -$2,460 | -$2,459 |
| $279 (-5%) | -$1,172 | -$1,072 | -$1,002 | -$990 |
| $288 (-2%) | -$444 | -$293 | -$157 | -$109 |
| $294 (0%) ← now | +$0 | +$185 | +$375 | +$479 |
| $300 (+2%) | +$404 | +$620 | +$865 | +$1,067 |
| $309 (+5%) | +$929 | +$1,178 | +$1,488 | +$1,948 |
| $315 (+7%) ← target | +$1,251 | +$1,511 | +$1,841 | +$2,595 |
| $323 (+10%) | +$1,585 | +$1,842 | +$2,160 | +$2,595 |
| $338 (+15%) | +$1,994 | +$2,210 | +$2,439 | +$2,595 |
| $353 (+20%) | +$2,220 | +$2,379 | +$2,516 | +$2,595 |
Why This Strategy, Why Now
- RSI at 59 — neutral-bullish
- IV -50% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 33 — strong trend, stock may run past strike
- No squeeze — no imminent breakout
Key Risks
ADP has bullish momentum (MACD). If a positive catalyst emerges (earnings beat, product launch), the stock could gap past your strike. Consider rolling the call up if ADP approaches the strike before expiry.
ADX at 33 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.