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Why LRCX Is an Excellent Covered Call Candidate Right Now Strong · 85/100
Lam Research Corp (Technology) · $393.02 ·
Analysis generated Jun 18, 2026 ·
Data as of market close Jun 18
Quick Take
LRCX is trading at $393.02 with RSI at 70 (neutral territory). Options IV is at 70% — 26% below its 30-day average of 95%. 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
69.9%
IV vs 30d Avg
-26%
MACD
bullish
ADX
28
MFI
74
The Setup
LRCX Covered Call
LONG STOCK
100 shares @ $393.02
SHORT CALL
$425 Aug '26 · $37.19/sh
Net Cost
$35,583
Max Profit
+$6,917
Break-even
$355.83
Projected P&L at Target
+$6,917
(19.4%)
P&L at Expiry
P&L Scenarios
What happens at different LRCX prices by expiry:
| LRCX Price | Today | Jul 9 | Jul 30 | Aug 21 (exp) |
|---|---|---|---|---|
| $314 (-20%) | -$5,177 | -$4,698 | -$4,281 | -$4,141 |
| $334 (-15%) | -$3,693 | -$3,088 | -$2,482 | -$2,176 |
| $354 (-10%) | -$2,333 | -$1,609 | -$803 | -$211 |
| $373 (-5%) | -$1,102 | -$274 | +$716 | +$1,754 |
| $385 (-2%) | -$426 | +$454 | +$1,540 | +$2,933 |
| $393 (0%) ← now | -$0 | +$909 | +$2,049 | +$3,719 |
| $401 (+2%) | +$405 | +$1,340 | +$2,525 | +$4,505 |
| $413 (+5%) | +$976 | +$1,941 | +$3,178 | +$5,684 |
| $425 (+8%) ← target | +$1,527 | +$2,513 | +$3,782 | +$6,917 |
| $432 (+10%) | +$1,833 | +$2,826 | +$4,103 | +$6,917 |
| $452 (+15%) | +$2,578 | +$3,575 | +$4,838 | +$6,917 |
| $472 (+20%) | +$3,221 | +$4,200 | +$5,403 | +$6,917 |
Why This Strategy, Why Now
- RSI at 70 — extended, ideal for selling calls
- IV -26% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 28 — moderate trend
- No squeeze — no imminent breakout
- MFI at 74 — money flow confirms overbought
Key Risks
LRCX 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 LRCX approaches the strike before expiry.
ADX at 28 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.