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Why TXN Is an Excellent Covered Call Candidate Right Now Strong · 85/100
Texas Instruments Incorporated (Technology) · $297.23 ·
Analysis generated Oct 7, 2026 ·
Data as of market close Oct 7
Quick Take
TXN is trading at $297.23 with RSI at 73 (overbought territory). Options IV is at 42% — 41% below its 30-day average of 70%. 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)
73
IV Today
41.5%
IV vs 30d Avg
-41%
MACD
bullish
ADX
22
MFI
79
The Setup
TXN Covered Call
LONG STOCK
100 shares @ $297.23
SHORT CALL
$320 Dec '26 · $13.6/sh
Net Cost
$28,363
Max Profit
+$3,637
Break-even
$283.63
Projected P&L at Target
+$3,637
(12.8%)
P&L at Expiry
P&L Scenarios
What happens at different TXN prices by expiry:
| TXN Price | Today | Oct 31 | Nov 24 | Dec 18 (exp) |
|---|---|---|---|---|
| $238 (-20%) | -$4,695 | -$4,619 | -$4,587 | -$4,585 |
| $253 (-15%) | -$3,341 | -$3,199 | -$3,110 | -$3,098 |
| $268 (-10%) | -$2,084 | -$1,856 | -$1,666 | -$1,612 |
| $282 (-5%) | -$954 | -$635 | -$305 | -$126 |
| $291 (-2%) | -$345 | +$23 | +$440 | +$766 |
| $297 (0%) ← now | +$28 | +$426 | +$897 | +$1,360 |
| $303 (+2%) | +$377 | +$798 | +$1,315 | +$1,954 |
| $312 (+5%) | +$852 | +$1,300 | +$1,867 | +$2,846 |
| $320 (+8%) ← target | +$1,226 | +$1,686 | +$2,275 | +$3,637 |
| $327 (+10%) | +$1,518 | +$1,982 | +$2,572 | +$3,637 |
| $342 (+15%) | +$2,039 | +$2,487 | +$3,029 | +$3,637 |
| $357 (+20%) | +$2,434 | +$2,842 | +$3,295 | +$3,637 |
Why This Strategy, Why Now
- RSI at 73 — extended, ideal for selling calls
- IV -41% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 22 — moderate trend
- No squeeze — no imminent breakout
- MFI at 79 — money flow confirms overbought
Key Risks
TXN 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 TXN approaches the strike before expiry.