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Why AMZN Is an Excellent Covered Call Candidate Right Now Strong · 80/100
Amazon.com Inc (Consumer Cyclical) · $271.58 ·
Analysis generated Jul 31, 2026 ·
Data as of market close Jul 31
Quick Take
AMZN is trading at $271.58 with RSI at 68 (neutral territory). Options IV is at 34% — 44% below its 30-day average of 61%. 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)
68
IV Today
34.2%
IV vs 30d Avg
-44%
MACD
bullish
ADX
23
MFI
48
The Setup
AMZN Covered Call
LONG STOCK
100 shares @ $271.58
SHORT CALL
$295 Sep '26 · $4.64/sh
Net Cost
$26,694
Max Profit
+$2,806
Break-even
$266.94
Projected P&L at Target
+$2,806
(10.5%)
P&L at Expiry
P&L Scenarios
What happens at different AMZN prices by expiry:
| AMZN Price | Today | Aug 17 | Sep 2 | Sep 18 (exp) |
|---|---|---|---|---|
| $217 (-20%) | -$4,982 | -$4,970 | -$4,968 | -$4,968 |
| $231 (-15%) | -$3,658 | -$3,623 | -$3,610 | -$3,610 |
| $244 (-10%) | -$2,389 | -$2,305 | -$2,257 | -$2,252 |
| $258 (-5%) | -$1,217 | -$1,060 | -$930 | -$894 |
| $266 (-2%) | -$580 | -$375 | -$173 | -$79 |
| $272 (0%) ← now | -$188 | +$48 | +$302 | +$464 |
| $277 (+2%) | +$176 | +$438 | +$743 | +$1,007 |
| $285 (+5%) | +$665 | +$959 | +$1,324 | +$1,822 |
| $295 (+9%) ← target | +$1,163 | +$1,476 | +$1,877 | +$2,806 |
| $299 (+10%) | +$1,327 | +$1,641 | +$2,042 | +$2,806 |
| $312 (+15%) | +$1,808 | +$2,104 | +$2,455 | +$2,806 |
| $326 (+20%) | +$2,137 | +$2,387 | +$2,646 | +$2,806 |
Why This Strategy, Why Now
- RSI at 68 — extended, ideal for selling calls
- IV -44% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 23 — moderate trend
- No squeeze — no imminent breakout
Key Risks
AMZN 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 AMZN approaches the strike before expiry.