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Why AVGO Is an Excellent Covered Call Candidate Right Now Strong · 78/100
Broadcom Inc (Technology) · $375.81 ·
Analysis generated Oct 7, 2026 ·
Data as of market close Oct 7
Quick Take
AVGO is trading at $375.81 with RSI at 60 (neutral territory). Options IV is at 43% — 22% below its 30-day average of 54%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
60
IV Today
42.7%
IV vs 30d Avg
-22%
MACD
bullish
ADX
19
MFI
68
The Setup
AVGO Covered Call
LONG STOCK
100 shares @ $375.81
SHORT CALL
$405 Dec '26 · $18.74/sh
Net Cost
$35,707
Max Profit
+$4,793
Break-even
$357.07
Projected P&L at Target
+$4,793
(13.4%)
P&L at Expiry
P&L Scenarios
What happens at different AVGO prices by expiry:
| AVGO Price | Today | Oct 31 | Nov 24 | Dec 18 (exp) |
|---|---|---|---|---|
| $301 (-20%) | -$5,837 | -$5,709 | -$5,647 | -$5,642 |
| $319 (-15%) | -$4,160 | -$3,939 | -$3,788 | -$3,763 |
| $338 (-10%) | -$2,609 | -$2,275 | -$1,981 | -$1,884 |
| $357 (-5%) | -$1,215 | -$767 | -$290 | -$5 |
| $368 (-2%) | -$464 | +$45 | +$632 | +$1,122 |
| $376 (0%) ← now | +$0 | +$545 | +$1,197 | +$1,874 |
| $383 (+2%) | +$434 | +$1,008 | +$1,717 | +$2,626 |
| $395 (+5%) | +$1,028 | +$1,635 | +$2,405 | +$3,753 |
| $405 (+8%) ← target | +$1,517 | +$2,141 | +$2,939 | +$4,793 |
| $413 (+10%) | +$1,871 | +$2,500 | +$3,301 | +$4,793 |
| $432 (+15%) | +$2,544 | +$3,156 | +$3,904 | +$4,793 |
| $451 (+20%) | +$3,066 | +$3,632 | +$4,273 | +$4,793 |
Why This Strategy, Why Now
- RSI at 60 — neutral-bullish
- IV -22% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 19 — 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.