← Best Covered Calls
/ DDOG
Why DDOG Is an Excellent Covered Call Candidate Right Now Strong · 85/100
Datadog Inc (Technology) · $278.24 ·
Analysis generated Oct 6, 2026 ·
Data as of market close Oct 6
Quick Take
DDOG is trading at $278.24 with RSI at 70 (overbought territory). Options IV is at 60% — 23% below its 30-day average of 78%. 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)
70
IV Today
60.1%
IV vs 30d Avg
-23%
MACD
bullish
ADX
29
MFI
75
The Setup
DDOG Covered Call
LONG STOCK
100 shares @ $278.24
SHORT CALL
$300 Dec '26 · $22.75/sh
Net Cost
$25,549
Max Profit
+$4,451
Break-even
$255.49
Projected P&L at Target
+$4,451
(17.4%)
P&L at Expiry
P&L Scenarios
What happens at different DDOG prices by expiry:
| DDOG Price | Today | Oct 31 | Nov 24 | Dec 18 (exp) |
|---|---|---|---|---|
| $223 (-20%) | -$3,893 | -$3,596 | -$3,354 | -$3,290 |
| $237 (-15%) | -$2,815 | -$2,427 | -$2,055 | -$1,899 |
| $250 (-10%) | -$1,827 | -$1,352 | -$836 | -$507 |
| $264 (-5%) | -$937 | -$386 | +$268 | +$884 |
| $273 (-2%) | -$449 | +$140 | +$865 | +$1,719 |
| $278 (0%) ← now | -$144 | +$467 | +$1,232 | +$2,275 |
| $284 (+2%) | +$145 | +$775 | +$1,574 | +$2,831 |
| $292 (+5%) | +$552 | +$1,203 | +$2,040 | +$3,666 |
| $300 (+8%) ← target | +$905 | +$1,568 | +$2,426 | +$4,451 |
| $306 (+10%) | +$1,157 | +$1,827 | +$2,690 | +$4,451 |
| $320 (+15%) | +$1,678 | +$2,347 | +$3,193 | +$4,451 |
| $334 (+20%) | +$2,120 | +$2,772 | +$3,567 | +$4,451 |
Why This Strategy, Why Now
- RSI at 70 — extended, ideal for selling calls
- IV -23% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 29 — moderate trend
- No squeeze — no imminent breakout
- MFI at 75 — money flow confirms overbought
Key Risks
DDOG 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 DDOG approaches the strike before expiry.
ADX at 29 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.