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AVGO Covered Call Strategy: Is Now a Good Time to Sell Calls? Moderate · 63/100
Broadcom Inc (Technology) · $389.28 ·
Analysis generated Jul 31, 2026 ·
Data as of market close Jul 31
Quick Take
AVGO is trading at $389.28 with RSI at 51 (neutral territory). Options IV is at 49% — 37% below its 30-day average of 78%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
51
IV Today
49.4%
IV vs 30d Avg
-37%
MACD
bullish
ADX
15
MFI
54
The Setup
AVGO Covered Call
LONG STOCK
100 shares @ $389.28
SHORT CALL
$420 Sep '26 · $19.5/sh
Net Cost
$36,978
Max Profit
+$5,022
Break-even
$369.78
Projected P&L at Target
+$5,022
(13.6%)
P&L at Expiry
P&L Scenarios
What happens at different AVGO prices by expiry:
| AVGO Price | Today | Aug 17 | Sep 2 | Sep 18 (exp) |
|---|---|---|---|---|
| $311 (-20%) | -$5,987 | -$5,884 | -$5,839 | -$5,836 |
| $331 (-15%) | -$4,215 | -$4,026 | -$3,906 | -$3,889 |
| $350 (-10%) | -$2,568 | -$2,270 | -$2,017 | -$1,943 |
| $370 (-5%) | -$1,082 | -$667 | -$234 | +$4 |
| $381 (-2%) | -$281 | +$198 | +$743 | +$1,171 |
| $389 (0%) ← now | +$215 | +$730 | +$1,344 | +$1,950 |
| $397 (+2%) | +$677 | +$1,223 | +$1,897 | +$2,729 |
| $409 (+5%) | +$1,309 | +$1,889 | +$2,628 | +$3,896 |
| $420 (+8%) ← target | +$1,850 | +$2,447 | +$3,216 | +$5,022 |
| $428 (+10%) | +$2,203 | +$2,804 | +$3,574 | +$5,022 |
| $448 (+15%) | +$2,908 | +$3,489 | +$4,199 | +$5,022 |
| $467 (+20%) | +$3,449 | +$3,978 | +$4,571 | +$5,022 |
Why This Strategy, Why Now
- RSI at 51 — neutral-bullish
- IV -37% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 15 — range-bound, perfect for selling calls
- TTM Squeeze ON — breakout imminent, risky for capped strategies
Key Risks
AVGO 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 AVGO approaches the strike before expiry.
TTM Squeeze is ON — a volatility breakout may be imminent. If the breakout is to the upside, your short call will be tested quickly.