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AVGO Covered Call Analysis: Proceed With Caution Weak · 58/100
Broadcom Inc (Technology) · $411.35 ·
Analysis generated Jun 18, 2026 ·
Data as of market close Jun 18
Quick Take
AVGO is trading at $411.35 with RSI at 51 (neutral territory). Options IV is at 51% — 36% below its 30-day average of 80%. 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
51.2%
IV vs 30d Avg
-36%
MACD
bearish
ADX
20
MFI
53
The Setup
AVGO Covered Call
LONG STOCK
100 shares @ $411.35
SHORT CALL
$445 Aug '26 · $23.82/sh
Net Cost
$38,753
Max Profit
+$5,747
Break-even
$387.53
Projected P&L at Target
+$5,747
(14.8%)
P&L at Expiry
P&L Scenarios
What happens at different AVGO prices by expiry:
| AVGO Price | Today | Jul 9 | Jul 30 | Aug 21 (exp) |
|---|---|---|---|---|
| $329 (-20%) | -$6,183 | -$5,982 | -$5,861 | -$5,845 |
| $350 (-15%) | -$4,407 | -$4,093 | -$3,848 | -$3,788 |
| $370 (-10%) | -$2,770 | -$2,330 | -$1,912 | -$1,731 |
| $391 (-5%) | -$1,296 | -$737 | -$120 | +$325 |
| $403 (-2%) | -$497 | +$126 | +$855 | +$1,559 |
| $411 (0%) ← now | -$0 | +$658 | +$1,455 | +$2,382 |
| $420 (+2%) | +$467 | +$1,156 | +$2,010 | +$3,205 |
| $432 (+5%) | +$1,113 | +$1,836 | +$2,754 | +$4,439 |
| $445 (+8%) ← target | +$1,727 | +$2,472 | +$3,424 | +$5,747 |
| $452 (+10%) | +$2,046 | +$2,797 | +$3,754 | +$5,747 |
| $473 (+15%) | +$2,813 | +$3,554 | +$4,471 | +$5,747 |
| $494 (+20%) | +$3,431 | +$4,132 | +$4,950 | +$5,747 |
Why This Strategy, Why Now
- RSI at 51 — neutral-bullish
- IV -36% vs avg — premiums below average, less income
- MACD bearish — stock may keep falling (risk)
- ADX at 20 — range-bound, perfect for selling calls
- No squeeze — no imminent breakout
Key Risks
The main risk is missing upside if AVGO rallies sharply. The premium received ($X per share) provides a buffer, but gains above the strike are forfeited.