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Why AVGO Is an Excellent Covered Call Candidate Right Now Strong · 80/100
Broadcom Inc (Technology) · $371.55 ·
Analysis generated Apr 13, 2026 ·
Data as of market close Apr 13
Quick Take
AVGO is trading at $371.55 with RSI at 71 (overbought territory). Options IV is at 48% — 28% below its 30-day average of 66%. 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
47.5%
IV vs 30d Avg
-28%
MACD
bullish
ADX
24
MFI
68
The Setup
AVGO Covered Call
LONG STOCK
100 shares @ $371.55
SHORT CALL
$400 Jun '26 · $21.0/sh
Net Cost
$35,055
Max Profit
+$4,945
Break-even
$350.55
Projected P&L at Target
+$4,945
(14.1%)
P&L at Expiry
P&L Scenarios
What happens at different AVGO prices by expiry:
| AVGO Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $297 (-20%) | -$5,605 | -$5,439 | -$5,342 | -$5,331 |
| $316 (-15%) | -$3,989 | -$3,723 | -$3,520 | -$3,473 |
| $334 (-10%) | -$2,501 | -$2,122 | -$1,765 | -$1,615 |
| $353 (-5%) | -$1,165 | -$678 | -$142 | +$242 |
| $364 (-2%) | -$443 | +$101 | +$738 | +$1,357 |
| $372 (0%) ← now | +$4 | +$580 | +$1,278 | +$2,100 |
| $379 (+2%) | +$423 | +$1,026 | +$1,774 | +$2,843 |
| $390 (+5%) | +$1,000 | +$1,633 | +$2,436 | +$3,958 |
| $400 (+8%) ← target | +$1,460 | +$2,109 | +$2,936 | +$4,945 |
| $409 (+10%) | +$1,828 | +$2,481 | +$3,312 | +$4,945 |
| $427 (+15%) | +$2,500 | +$3,140 | +$3,925 | +$4,945 |
| $446 (+20%) | +$3,034 | +$3,633 | +$4,322 | +$4,945 |
Why This Strategy, Why Now
- RSI at 71 — extended, ideal for selling calls
- IV -28% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 24 — moderate trend
- No squeeze — no imminent breakout
Key Risks
AVGO 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 AVGO approaches the strike before expiry.