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Why MELI Is an Excellent Covered Call Candidate Right Now Strong · 85/100
MercadoLibre Inc. (Consumer Cyclical) · $1840.66 ·
Analysis generated Apr 14, 2026 ·
Data as of market close Apr 14
Quick Take
MELI is trading at $1840.66 with RSI at 62 (neutral territory). Options IV is at 43% — 32% below its 30-day average of 63%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
62
IV Today
43.2%
IV vs 30d Avg
-32%
MACD
bullish
ADX
27
MFI
77
The Setup
MELI Covered Call
LONG STOCK
100 shares @ $1840.66
SHORT CALL
$1990 Jun '26 · $84.42/sh
Net Cost
$175,624
Max Profit
+$23,376
Break-even
$1756.24
Projected P&L at Target
+$23,376
(13.3%)
P&L at Expiry
P&L Scenarios
What happens at different MELI prices by expiry:
| MELI Price | Today | May 6 | May 28 | Jun 19 (exp) |
|---|---|---|---|---|
| $1473 (-20%) | -$29,147 | -$28,635 | -$28,387 | -$28,371 |
| $1565 (-15%) | -$20,815 | -$19,892 | -$19,261 | -$19,168 |
| $1657 (-10%) | -$13,075 | -$11,637 | -$10,350 | -$9,965 |
| $1749 (-5%) | -$6,096 | -$4,118 | -$1,961 | -$761 |
| $1804 (-2%) | -$2,327 | -$56 | +$2,642 | +$4,761 |
| $1841 (0%) ← now | -$0 | +$2,442 | +$5,471 | +$8,442 |
| $1877 (+2%) | +$2,175 | +$4,762 | +$8,079 | +$12,123 |
| $1933 (+5%) | +$5,153 | +$7,902 | +$11,540 | +$17,645 |
| $1990 (+8%) ← target | +$7,886 | +$10,729 | +$14,531 | +$23,376 |
| $2025 (+10%) | +$9,371 | +$12,233 | +$16,048 | +$23,376 |
| $2117 (+15%) | +$12,718 | +$15,506 | +$19,075 | +$23,376 |
| $2209 (+20%) | +$15,297 | +$17,869 | +$20,913 | +$23,376 |
Why This Strategy, Why Now
- RSI at 62 — extended, ideal for selling calls
- IV -32% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 27 — moderate trend
- No squeeze — no imminent breakout
- MFI at 77 — money flow confirms overbought
Key Risks
MELI 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 MELI approaches the strike before expiry.
ADX at 27 indicates a moderately strong trend. In trending markets, covered calls cap your upside too early. Use a higher strike to leave more room.