RDWR Covered Call Strategy
RDWR (Radware Ltd.), in the Technology sector, (Software - Infrastructure industry), listed on NASDAQ.
Radware Ltd., together with its subsidiaries, develops, manufactures, and markets cyber security and application delivery solutions for applications in cloud, physical, and software defined data centers worldwide. The company offers DefensePro, a real-time network attack mitigation device; AppWall, a Web application firewall; Radware Kubernetes WAF, a Web application firewall solution for CI/CD environments orchestrated by Kubernetes; and DefenseFlow, a cyber-command and control application. It also provides Alteon, an application delivery controller/load balancer for web, cloud, and mobile based applications; and LinkProof NG, a multi-homing and enterprise gateway solution for connectivity of enterprise and cloud-based applications. In addition, the company offers Security Updates Subscription, which provides protection from network elements, hosts and applications against the latest security vulnerabilities and threats; ERT Active Attackers Feed that provides customers with information pertaining to attack sources recently involved in DDoS attacks and web attacks; Alteon Global Elastic License that enables a high level of flexibility for ADC services across datacenters, private and public clouds; APSolute Vision, a network monitoring tool for cyber security and application delivery solutions; and MSSP Portal, a DDoS detection and mitigation service portal. Further, it provides Cloud DDoS Protection Service, which offers a range of enterprise-grade DDoS protection services in the cloud, as well as technical support, professional, managed, and training and certification services to its customers. The company sells its products primarily to independent distributors, including value added resellers, original equipment manufacturers, and system integrators.
RDWR (Radware Ltd.) trades in the Technology sector, specifically Software - Infrastructure, with a market capitalization of approximately $1.16B, a trailing P/E of 59.28, a beta of 0.82 versus the broader market, a 52-week range of 21.68-31.57, average daily share volume of 277K, a public-listing history dating back to 1999, approximately 1K full-time employees. These structural characteristics shape how RDWR stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.82 places RDWR roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 59.28 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple.
What is a covered call on RDWR?
A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income.
Current RDWR snapshot
As of May 15, 2026, spot at $27.98, ATM IV 44.30%, IV rank 34.03%, expected move 12.70%. The covered call on RDWR below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 34-day expiry.
Why this covered call structure on RDWR specifically: RDWR IV at 44.30% is mid-range versus its 1-year history, so the credit collected on a RDWR covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 12.70% (roughly $3.55 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RDWR expiries trade a higher absolute premium for lower per-day decay. Position sizing on RDWR should anchor to the underlying notional of $27.98 per share and to the trader's directional view on RDWR stock.
RDWR covered call setup
The RDWR covered call below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With RDWR near $27.98, the first option leg uses a $29.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RDWR chain at a 34-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 RDWR shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $27.98 | long |
| Sell 1 | Call | $29.00 | $1.23 |
RDWR covered call risk and reward
- Net Premium / Debit
- -$2,675.50
- Max Profit (per contract)
- $224.50
- Max Loss (per contract)
- -$2,674.50
- Breakeven(s)
- $26.76
- Risk / Reward Ratio
- 0.084
Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium.
RDWR covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call on RDWR. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$2,674.50 |
| $6.20 | -77.9% | -$2,055.96 |
| $12.38 | -55.8% | -$1,437.41 |
| $18.57 | -33.6% | -$818.87 |
| $24.75 | -11.5% | -$200.33 |
| $30.94 | +10.6% | +$224.50 |
| $37.12 | +32.7% | +$224.50 |
| $43.31 | +54.8% | +$224.50 |
| $49.49 | +76.9% | +$224.50 |
| $55.68 | +99.0% | +$224.50 |
When traders use covered call on RDWR
Covered calls on RDWR are an income strategy run on existing RDWR stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
RDWR thesis for this covered call
The market-implied 1-standard-deviation range for RDWR extends from approximately $24.43 on the downside to $31.53 on the upside. A RDWR covered call collects premium on an existing long RDWR position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether RDWR will breach that level within the expiration window. Current RDWR IV rank near 34.03% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on RDWR should anchor more to the directional view and the expected-move geometry. As a Technology name, RDWR options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RDWR-specific events.
RDWR covered call positions are structurally neutral to slightly bullish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. RDWR positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RDWR alongside the broader basket even when RDWR-specific fundamentals are unchanged. Short-premium structures like a covered call on RDWR carry tail risk when realized volatility exceeds the implied move; review historical RDWR earnings reactions and macro stress periods before sizing. Always rebuild the position from current RDWR chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on RDWR?
- A covered call on RDWR is the covered call strategy applied to RDWR (stock). The strategy is structurally neutral to slightly bullish: A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income. With RDWR stock trading near $27.98, the strikes shown on this page are snapped to the nearest listed RDWR chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RDWR covered call max profit and max loss calculated?
- Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the RDWR covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 44.30%), the computed maximum profit is $224.50 per contract and the computed maximum loss is -$2,674.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RDWR covered call?
- The breakeven for the RDWR covered call priced on this page is roughly $26.76 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current RDWR market-implied 1-standard-deviation expected move is approximately 12.70%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a covered call on RDWR?
- Covered calls on RDWR are an income strategy run on existing RDWR stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
- How does current RDWR implied volatility affect this covered call?
- RDWR ATM IV is at 44.30% with IV rank near 34.03%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.