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Why AVGO Is an Excellent Covered Call Candidate Right Now Strong · 78/100
Broadcom Inc (Technology) · $399.97 ·
Analysis generated Jul 10, 2026 ·
Data as of market close Jul 10
Quick Take
AVGO is trading at $399.97 with RSI at 54 (neutral territory). Options IV is at 51% — 36% 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)
54
IV Today
50.6%
IV vs 30d Avg
-36%
MACD
bullish
ADX
20
MFI
40
The Setup
AVGO Covered Call
LONG STOCK
100 shares @ $399.97
SHORT CALL
$430 Sep '26 · $26.6/sh
Net Cost
$37,337
Max Profit
+$5,663
Break-even
$373.37
Projected P&L at Target
+$5,663
(15.2%)
P&L at Expiry
P&L Scenarios
What happens at different AVGO prices by expiry:
| AVGO Price | Today | Aug 3 | Aug 26 | Sep 18 (exp) |
|---|---|---|---|---|
| $320 (-20%) | -$5,730 | -$5,502 | -$5,359 | -$5,339 |
| $340 (-15%) | -$4,034 | -$3,690 | -$3,412 | -$3,340 |
| $360 (-10%) | -$2,477 | -$2,007 | -$1,547 | -$1,340 |
| $380 (-5%) | -$1,080 | -$493 | +$168 | +$660 |
| $392 (-2%) | -$324 | +$323 | +$1,095 | +$1,860 |
| $400 (0%) ← now | +$145 | +$826 | +$1,662 | +$2,660 |
| $408 (+2%) | +$586 | +$1,295 | +$2,185 | +$3,460 |
| $420 (+5%) | +$1,195 | +$1,936 | +$2,883 | +$4,660 |
| $430 (+8%) ← target | +$1,658 | +$2,414 | +$3,386 | +$5,663 |
| $440 (+10%) | +$2,077 | +$2,839 | +$3,816 | +$5,663 |
| $460 (+15%) | +$2,802 | +$3,551 | +$4,479 | +$5,663 |
| $480 (+20%) | +$3,387 | +$4,095 | +$4,921 | +$5,663 |
Why This Strategy, Why Now
- RSI at 54 — neutral-bullish
- IV -36% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 20 — range-bound, perfect for selling calls
- No squeeze — no imminent breakout
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.