← Best Covered Calls
/ CAT
Why CAT Is an Excellent Covered Call Candidate Right Now Strong · 85/100
CAT · $790.66 ·
Analysis generated Apr 13, 2026 ·
Data as of market close Apr 13
Quick Take
CAT is trading at $790.66 with RSI at 66 (neutral territory). Options IV is at 37% — 45% below its 30-day average of 68%. 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)
66
IV Today
37.2%
IV vs 30d Avg
-45%
MACD
bullish
ADX
16
MFI
55
The Setup
CAT Covered Call
LONG STOCK
100 shares @ $790.66
SHORT CALL
$850 Jun '26 · $31.0/sh
Net Cost
$75,966
Max Profit
+$9,034
Break-even
$759.66
Projected P&L at Target
+$9,034
(11.9%)
P&L at Expiry
P&L Scenarios
What happens at different CAT prices by expiry:
| CAT Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $633 (-20%) | -$12,912 | -$12,769 | -$12,715 | -$12,713 |
| $672 (-15%) | -$9,241 | -$8,948 | -$8,780 | -$8,760 |
| $712 (-10%) | -$5,815 | -$5,311 | -$4,912 | -$4,807 |
| $751 (-5%) | -$2,727 | -$1,987 | -$1,243 | -$853 |
| $775 (-2%) | -$1,069 | -$197 | +$773 | +$1,519 |
| $791 (0%) ← now | -$52 | +$896 | +$2,007 | +$3,100 |
| $806 (+2%) | +$892 | +$1,905 | +$3,137 | +$4,681 |
| $830 (+5%) | +$2,170 | +$3,253 | +$4,615 | +$7,053 |
| $850 (+8%) ← target | +$3,112 | +$4,226 | +$5,640 | +$9,034 |
| $870 (+10%) | +$3,940 | +$5,061 | +$6,473 | +$9,034 |
| $909 (+15%) | +$5,294 | +$6,363 | +$7,635 | +$9,034 |
| $949 (+20%) | +$6,289 | +$7,244 | +$8,273 | +$9,034 |
Why This Strategy, Why Now
- RSI at 66 — extended, ideal for selling calls
- IV -45% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 16 — range-bound, perfect for selling calls
- No squeeze — no imminent breakout
Key Risks
CAT 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 CAT approaches the strike before expiry.