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AMAT Covered Call Strategy: Is Now a Good Time to Sell Calls? Moderate · 70/100
Applied Materials Inc (Technology) · $614.05 ·
Analysis generated Jun 18, 2026 ·
Data as of market close Jun 18
Quick Take
AMAT is trading at $614.05 with RSI at 76 (overbought territory). Options IV is at 68% — 26% below its 30-day average of 91%. While the stock is extended, IV is below average which means premiums aren't as rich. The trade still works but yields less income than usual.
Technical Signals
RSI (14)
76
IV Today
67.5%
IV vs 30d Avg
-26%
MACD
bullish
ADX
30
MFI
79
The Setup
AMAT Covered Call
LONG STOCK
100 shares @ $614.05
SHORT CALL
$660 Aug '26 · $62.36/sh
Net Cost
$55,169
Max Profit
+$10,831
Break-even
$551.69
Projected P&L at Target
+$10,831
(19.6%)
P&L at Expiry
P&L Scenarios
What happens at different AMAT prices by expiry:
| AMAT Price | Today | Jul 9 | Jul 30 | Aug 21 (exp) |
|---|---|---|---|---|
| $491 (-20%) | -$7,524 | -$6,829 | -$6,234 | -$6,045 |
| $522 (-15%) | -$5,182 | -$4,291 | -$3,407 | -$2,975 |
| $553 (-10%) | -$3,041 | -$1,963 | -$770 | +$95 |
| $583 (-5%) | -$1,107 | +$132 | +$1,612 | +$3,166 |
| $602 (-2%) | -$49 | +$1,269 | +$2,896 | +$5,008 |
| $614 (0%) ← now | +$615 | +$1,978 | +$3,687 | +$6,236 |
| $626 (+2%) | +$1,246 | +$2,647 | +$4,425 | +$7,464 |
| $645 (+5%) | +$2,132 | +$3,577 | +$5,430 | +$9,306 |
| $660 (+7%) ← target | +$2,812 | +$4,281 | +$6,171 | +$10,831 |
| $675 (+10%) | +$3,454 | +$4,937 | +$6,840 | +$10,831 |
| $706 (+15%) | +$4,594 | +$6,075 | +$7,939 | +$10,831 |
| $737 (+20%) | +$5,569 | +$7,013 | +$8,768 | +$10,831 |
Why This Strategy, Why Now
- RSI at 76 — extended, ideal for selling calls
- IV -26% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 30 — strong trend, stock may run past strike
- No squeeze — no imminent breakout
- MFI at 79 — money flow confirms overbought
Key Risks
AMAT 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 AMAT approaches the strike before expiry.
ADX at 30 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.