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ALRM Covered Call Strategy: Is Now a Good Time to Sell Calls? Moderate · 73/100
ALRM · $42.65 ·
Analysis generated Nov 26, 2025 ·
Data as of market close Nov 26
· Market closed — data may be from last trading day
Quick Take
ALRM is trading at $42.65 with RSI at 56 (neutral territory). Options IV is at 33% — 44% below its 30-day average of 60%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
56
IV Today
33.4%
IV vs 30d Avg
-44%
MACD
bullish
ADX
21
MFI
58
The Setup
ALRM Covered Call
LONG STOCK
100 shares @ $42.65
SHORT CALL
$46 Jun '26 · $2.83/sh
Net Cost
$3,982
Max Profit
+$618
Break-even
$39.82
Projected P&L at Target
+$618
(15.5%)
P&L at Expiry
P&L Scenarios
What happens at different ALRM prices by expiry:
| ALRM Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $34 (-20%) | -$619 | -$592 | -$573 | -$570 |
| $36 (-15%) | -$441 | -$401 | -$367 | -$357 |
| $38 (-10%) | -$277 | -$224 | -$171 | -$144 |
| $41 (-5%) | -$130 | -$64 | +$10 | +$70 |
| $42 (-2%) | -$50 | +$22 | +$107 | +$198 |
| $43 (0%) ← now | -$0 | +$75 | +$167 | +$283 |
| $44 (+2%) | +$47 | +$125 | +$222 | +$368 |
| $45 (+5%) | +$112 | +$193 | +$297 | +$496 |
| $46 (+8%) ← target | +$168 | +$251 | +$358 | +$618 |
| $47 (+10%) | +$206 | +$290 | +$398 | +$618 |
| $49 (+15%) | +$286 | +$369 | +$472 | +$618 |
| $51 (+20%) | +$350 | +$430 | +$523 | +$618 |
Why This Strategy, Why Now
- RSI at 56 — neutral-bullish
- IV -44% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 21 — moderate trend
- No squeeze — no imminent breakout
Key Risks
ALRM 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 ALRM approaches the strike before expiry.