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Why SHOP Is an Excellent Covered Call Candidate Right Now Strong · 85/100
Shopify Inc (Technology) · $164.44 ·
Analysis generated Oct 6, 2026 ·
Data as of market close Oct 6
Quick Take
SHOP is trading at $164.44 with RSI at 71 (overbought territory). Options IV is at 57% — 17% 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)
71
IV Today
56.8%
IV vs 30d Avg
-17%
MACD
bullish
ADX
17
MFI
65
The Setup
SHOP Covered Call
LONG STOCK
100 shares @ $164.44
SHORT CALL
$180 Dec '26 · $11.49/sh
Net Cost
$15,295
Max Profit
+$2,705
Break-even
$152.95
Projected P&L at Target
+$2,705
(17.7%)
P&L at Expiry
P&L Scenarios
What happens at different SHOP prices by expiry:
| SHOP Price | Today | Oct 31 | Nov 24 | Dec 18 (exp) |
|---|---|---|---|---|
| $132 (-20%) | -$2,395 | -$2,258 | -$2,159 | -$2,140 |
| $140 (-15%) | -$1,726 | -$1,537 | -$1,371 | -$1,318 |
| $148 (-10%) | -$1,109 | -$868 | -$621 | -$495 |
| $156 (-5%) | -$551 | -$261 | +$70 | +$327 |
| $161 (-2%) | -$245 | +$70 | +$447 | +$820 |
| $164 (0%) ← now | -$53 | +$276 | +$681 | +$1,149 |
| $168 (+2%) | +$129 | +$471 | +$899 | +$1,478 |
| $173 (+5%) | +$384 | +$741 | +$1,198 | +$1,971 |
| $180 (+9%) ← target | +$725 | +$1,097 | +$1,576 | +$2,705 |
| $189 (+15%) | +$1,087 | +$1,462 | +$1,939 | +$2,705 |
| $197 (+20%) | +$1,361 | +$1,727 | +$2,177 | +$2,705 |
Why This Strategy, Why Now
- RSI at 71 — extended, ideal for selling calls
- IV -17% 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
SHOP 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 SHOP approaches the strike before expiry.