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Why TSM Is an Excellent Covered Call Candidate Right Now Strong · 80/100
TSM · $370.60 ·
Analysis generated Apr 10, 2026 ·
Data as of market close Apr 10
· Market closed — data may be from last trading day
Quick Take
TSM is trading at $370.60 with RSI at 63 (neutral territory). Options IV is at 45% — 27% below its 30-day average of 62%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
63
IV Today
45.1%
IV vs 30d Avg
-27%
MACD
bullish
ADX
22
MFI
64
The Setup
TSM Covered Call
LONG STOCK
100 shares @ $370.6
SHORT CALL
$400 Jun '26 · $18.4/sh
Net Cost
$35,220
Max Profit
+$4,780
Break-even
$352.20
Projected P&L at Target
+$4,780
(13.6%)
P&L at Expiry
P&L Scenarios
What happens at different TSM prices by expiry:
| TSM Price | Today | May 5 | May 27 | Jun 19 (exp) |
|---|---|---|---|---|
| $296 (-20%) | -$5,786 | -$5,650 | -$5,579 | -$5,572 |
| $315 (-15%) | -$4,143 | -$3,914 | -$3,751 | -$3,719 |
| $334 (-10%) | -$2,624 | -$2,286 | -$1,980 | -$1,866 |
| $352 (-5%) | -$1,258 | -$809 | -$328 | -$13 |
| $363 (-2%) | -$520 | -$12 | +$573 | +$1,099 |
| $371 (0%) ← now | -$63 | +$477 | +$1,125 | +$1,840 |
| $378 (+2%) | +$364 | +$933 | +$1,634 | +$2,581 |
| $389 (+5%) | +$951 | +$1,552 | +$2,312 | +$3,693 |
| $400 (+8%) ← target | +$1,464 | +$2,082 | +$2,871 | +$4,780 |
| $408 (+10%) | +$1,789 | +$2,412 | +$3,204 | +$4,780 |
| $426 (+15%) | +$2,463 | +$3,072 | +$3,818 | +$4,780 |
| $445 (+20%) | +$2,992 | +$3,559 | +$4,207 | +$4,780 |
Why This Strategy, Why Now
- RSI at 63 — extended, ideal for selling calls
- IV -27% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 22 — moderate trend
- No squeeze — no imminent breakout
Key Risks
TSM 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 TSM approaches the strike before expiry.