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AAOI Covered Call Strategy: Is Now a Good Time to Sell Calls? Moderate · 70/100
AAOI · $150.60 ·
Analysis generated Apr 10, 2026 ·
Data as of market close Apr 10
· Market closed — data may be from last trading day
Quick Take
AAOI is trading at $150.60 with RSI at 71 (overbought territory). Options IV is at 118% — 27% below its 30-day average of 162%. 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
118.2%
IV vs 30d Avg
-27%
MACD
bullish
ADX
31
MFI
81
The Setup
AAOI Covered Call
LONG STOCK
100 shares @ $150.6
SHORT CALL
$165 Jun '26 · $31.69/sh
Net Cost
$11,891
Max Profit
+$4,609
Break-even
$118.91
Projected P&L at Target
+$4,609
(38.8%)
P&L at Expiry
P&L Scenarios
What happens at different AAOI prices by expiry:
| AAOI Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $120 (-20%) | -$1,146 | -$708 | -$213 | +$157 |
| $128 (-15%) | -$696 | -$210 | +$366 | +$910 |
| $136 (-10%) | -$279 | +$249 | +$900 | +$1,663 |
| $143 (-5%) | +$107 | +$672 | +$1,386 | +$2,416 |
| $148 (-2%) | +$325 | +$908 | +$1,655 | +$2,868 |
| $151 (0%) ← now | +$464 | +$1,059 | +$1,824 | +$3,169 |
| $154 (+2%) | +$599 | +$1,203 | +$1,986 | +$3,470 |
| $158 (+5%) | +$793 | +$1,411 | +$2,214 | +$3,922 |
| $165 (+10%) ← target | +$1,071 | +$1,704 | +$2,531 | +$4,609 |
| $173 (+15%) | +$1,375 | +$2,021 | +$2,862 | +$4,609 |
| $181 (+20%) | +$1,630 | +$2,283 | +$3,124 | +$4,609 |
Why This Strategy, Why Now
- RSI at 71 — extended, ideal for selling calls
- IV -27% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 31 — strong trend, stock may run past strike
- No squeeze — no imminent breakout
- MFI at 81 — money flow confirms overbought
Key Risks
AAOI 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 AAOI approaches the strike before expiry.
ADX at 31 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.