← Best Covered Calls
/ COST
Why COST Is an Excellent Covered Call Candidate Right Now Strong · 80/100
Costco Wholesale Corp (Consumer Defensive) · $998.47 ·
Analysis generated Apr 13, 2026 ·
Data as of market close Apr 13
Quick Take
COST is trading at $998.47 with RSI at 67 (neutral territory). Options IV is at 26% — 38% below its 30-day average of 42%. 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
26.1%
IV vs 30d Avg
-38%
MACD
bullish
ADX
20
MFI
63
The Setup
COST Covered Call
LONG STOCK
100 shares @ $998.47
SHORT CALL
$1080 Jun '26 · $12.57/sh
Net Cost
$98,590
Max Profit
+$9,410
Break-even
$985.90
Projected P&L at Target
+$9,410
(9.5%)
P&L at Expiry
P&L Scenarios
What happens at different COST prices by expiry:
| COST Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $799 (-20%) | -$18,721 | -$18,713 | -$18,712 | -$18,712 |
| $849 (-15%) | -$13,774 | -$13,729 | -$13,720 | -$13,720 |
| $899 (-10%) | -$8,950 | -$8,795 | -$8,732 | -$8,728 |
| $949 (-5%) | -$4,425 | -$4,048 | -$3,786 | -$3,735 |
| $979 (-2%) | -$1,956 | -$1,405 | -$917 | -$740 |
| $998 (0%) ← now | -$445 | +$224 | +$897 | +$1,257 |
| $1018 (+2%) | +$942 | +$1,721 | +$2,583 | +$3,254 |
| $1048 (+5%) | +$2,770 | +$3,677 | +$4,777 | +$6,249 |
| $1080 (+8%) ← target | +$4,360 | +$5,334 | +$6,556 | +$9,410 |
| $1098 (+10%) | +$5,124 | +$6,103 | +$7,319 | +$9,410 |
| $1148 (+15%) | +$6,676 | +$7,560 | +$8,547 | +$9,410 |
| $1198 (+20%) | +$7,599 | +$8,305 | +$8,974 | +$9,410 |
Why This Strategy, Why Now
- RSI at 67 — extended, ideal for selling calls
- IV -38% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 20 — moderate trend
- No squeeze — no imminent breakout
Key Risks
COST 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 COST approaches the strike before expiry.