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Why PANW Is an Excellent Covered Call Candidate Right Now Strong · 85/100
Palo Alto Networks Inc (Technology) · $419.91 ·
Analysis generated Oct 6, 2026 ·
Data as of market close Oct 6
Quick Take
PANW is trading at $419.91 with RSI at 67 (neutral territory). Options IV is at 53% — 21% below its 30-day average of 68%. 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)
67
IV Today
53.4%
IV vs 30d Avg
-21%
MACD
bullish
ADX
17
MFI
65
The Setup
PANW Covered Call
LONG STOCK
100 shares @ $419.91
SHORT CALL
$455 Dec '26 · $28.48/sh
Net Cost
$39,143
Max Profit
+$6,357
Break-even
$391.43
Projected P&L at Target
+$6,357
(16.2%)
P&L at Expiry
P&L Scenarios
What happens at different PANW prices by expiry:
| PANW Price | Today | Oct 31 | Nov 24 | Dec 18 (exp) |
|---|---|---|---|---|
| $336 (-20%) | -$6,070 | -$5,779 | -$5,582 | -$5,550 |
| $357 (-15%) | -$4,326 | -$3,907 | -$3,553 | -$3,451 |
| $378 (-10%) | -$2,722 | -$2,170 | -$1,617 | -$1,351 |
| $399 (-5%) | -$1,278 | -$602 | +$163 | +$748 |
| $412 (-2%) | -$491 | +$248 | +$1,130 | +$2,008 |
| $420 (0%) ← now | -$0 | +$775 | +$1,726 | +$2,848 |
| $428 (+2%) | +$463 | +$1,269 | +$2,279 | +$3,688 |
| $441 (+5%) | +$1,108 | +$1,950 | +$3,026 | +$4,948 |
| $455 (+8%) ← target | +$1,760 | +$2,626 | +$3,741 | +$6,357 |
| $462 (+10%) | +$2,053 | +$2,925 | +$4,046 | +$6,357 |
| $483 (+15%) | +$2,846 | +$3,714 | +$4,804 | +$6,357 |
| $504 (+20%) | +$3,502 | +$4,336 | +$5,336 | +$6,357 |
Why This Strategy, Why Now
- RSI at 67 — extended, ideal for selling calls
- IV -21% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 17 — range-bound, perfect for selling calls
- No squeeze — no imminent breakout
Key Risks
PANW 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 PANW approaches the strike before expiry.