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Why AMAT Is an Excellent Covered Call Candidate Right Now Strong · 85/100
Applied Materials Inc (Technology) · $399.49 ·
Analysis generated Apr 13, 2026 ·
Data as of market close Apr 13
Quick Take
AMAT is trading at $399.49 with RSI at 67 (neutral territory). Options IV is at 50% — 37% below its 30-day average of 80%. 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
50.1%
IV vs 30d Avg
-37%
MACD
bullish
ADX
17
MFI
63
The Setup
AMAT Covered Call
LONG STOCK
100 shares @ $399.49
SHORT CALL
$430 Jun '26 · $27.58/sh
Net Cost
$37,191
Max Profit
+$5,809
Break-even
$371.91
Projected P&L at Target
+$5,809
(15.6%)
P&L at Expiry
P&L Scenarios
What happens at different AMAT prices by expiry:
| AMAT Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $320 (-20%) | -$5,649 | -$5,412 | -$5,257 | -$5,232 |
| $340 (-15%) | -$3,963 | -$3,611 | -$3,319 | -$3,234 |
| $360 (-10%) | -$2,417 | -$1,942 | -$1,470 | -$1,237 |
| $380 (-5%) | -$1,028 | -$438 | +$228 | +$761 |
| $392 (-2%) | -$276 | +$373 | +$1,145 | +$1,959 |
| $399 (0%) ← now | +$192 | +$873 | +$1,708 | +$2,758 |
| $407 (+2%) | +$632 | +$1,341 | +$2,227 | +$3,557 |
| $419 (+5%) | +$1,241 | +$1,981 | +$2,923 | +$4,755 |
| $430 (+8%) ← target | +$1,727 | +$2,484 | +$3,452 | +$5,809 |
| $439 (+10%) | +$2,125 | +$2,888 | +$3,860 | +$5,809 |
| $459 (+15%) | +$2,856 | +$3,607 | +$4,537 | +$5,809 |
| $479 (+20%) | +$3,450 | +$4,163 | +$4,997 | +$5,809 |
Why This Strategy, Why Now
- RSI at 67 — extended, ideal for selling calls
- IV -37% 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
AMAT 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 AMAT approaches the strike before expiry.