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Why CSCO Is an Excellent Covered Call Candidate Right Now Strong · 80/100
Cisco Systems Inc (Technology) · $117.94 ·
Analysis generated Oct 7, 2026 ·
Data as of market close Oct 7
Quick Take
CSCO is trading at $117.94 with RSI at 68 (neutral territory). Options IV is at 34% — 34% below its 30-day average of 52%. While the stock is extended, IV is below average which means premiums aren't as rich. The trade still works but yields less income than usual.
Technical Signals
RSI (14)
68
IV Today
33.9%
IV vs 30d Avg
-34%
MACD
bullish
ADX
26
MFI
47
The Setup
CSCO Covered Call
LONG STOCK
100 shares @ $117.94
SHORT CALL
$125 Dec '26 · $5.38/sh
Net Cost
$11,256
Max Profit
+$1,244
Break-even
$112.56
Projected P&L at Target
+$1,244
(11.1%)
P&L at Expiry
P&L Scenarios
What happens at different CSCO prices by expiry:
| CSCO Price | Today | Oct 31 | Nov 24 | Dec 18 (exp) |
|---|---|---|---|---|
| $94 (-20%) | -$1,862 | -$1,834 | -$1,822 | -$1,821 |
| $100 (-15%) | -$1,326 | -$1,271 | -$1,236 | -$1,231 |
| $106 (-10%) | -$831 | -$741 | -$665 | -$641 |
| $112 (-5%) | -$391 | -$266 | -$133 | -$52 |
| $116 (-2%) | -$156 | -$13 | +$154 | +$302 |
| $118 (0%) ← now | -$14 | +$140 | +$327 | +$538 |
| $120 (+2%) | +$118 | +$280 | +$483 | +$774 |
| $125 (+6%) ← target | +$349 | +$520 | +$739 | +$1,244 |
| $130 (+10%) | +$539 | +$711 | +$925 | +$1,244 |
| $136 (+15%) | +$724 | +$884 | +$1,071 | +$1,244 |
| $142 (+20%) | +$858 | +$1,000 | +$1,148 | +$1,244 |
Why This Strategy, Why Now
- RSI at 68 — extended, ideal for selling calls
- IV -34% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 26 — moderate trend
- No squeeze — no imminent breakout
Key Risks
CSCO 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 CSCO approaches the strike before expiry.
ADX at 26 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.