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ARM Covered Call Strategy: Is Now a Good Time to Sell Calls? Moderate · 70/100
Arm Holdings plc American Depositary Shares (Technology) · $250.72 ·
Analysis generated Aug 20, 2026 ·
Data as of market close Aug 20
Quick Take
ARM is trading at $250.72 with RSI at 41 (neutral territory). Options IV is at 71% — 31% below its 30-day average of 103%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
41
IV Today
71.0%
IV vs 30d Avg
-31%
MACD
bullish
ADX
13
MFI
56
The Setup
ARM Covered Call
LONG STOCK
100 shares @ $250.72
SHORT CALL
$270 Oct '26 · $20.21/sh
Net Cost
$23,051
Max Profit
+$3,949
Break-even
$230.51
Projected P&L at Target
+$3,949
(17.1%)
P&L at Expiry
P&L Scenarios
What happens at different ARM prices by expiry:
| ARM Price | Today | Sep 8 | Sep 27 | Oct 16 (exp) |
|---|---|---|---|---|
| $201 (-20%) | -$3,504 | -$3,259 | -$3,048 | -$2,993 |
| $213 (-15%) | -$2,524 | -$2,202 | -$1,876 | -$1,740 |
| $226 (-10%) | -$1,626 | -$1,230 | -$775 | -$486 |
| $238 (-5%) | -$817 | -$355 | +$222 | +$767 |
| $246 (-2%) | -$374 | +$120 | +$761 | +$1,520 |
| $251 (0%) ← now | -$97 | +$416 | +$1,093 | +$2,021 |
| $256 (+2%) | +$166 | +$694 | +$1,401 | +$2,522 |
| $263 (+5%) | +$535 | +$1,081 | +$1,821 | +$3,275 |
| $270 (+8%) ← target | +$840 | +$1,396 | +$2,153 | +$3,949 |
| $276 (+10%) | +$1,082 | +$1,644 | +$2,405 | +$3,949 |
| $288 (+15%) | +$1,552 | +$2,111 | +$2,856 | +$3,949 |
| $301 (+20%) | +$1,950 | +$2,493 | +$3,189 | +$3,949 |
Why This Strategy, Why Now
- RSI at 41
- IV -31% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 13 — range-bound, perfect for selling calls
- No squeeze — no imminent breakout
Key Risks
ARM 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 ARM approaches the strike before expiry.