$SCHW Options Intelligence

🎯 SELL SCHW 2025-11-21 100/105 CALL SPREAD

I recommend a short call vertical spread expiring 4 days from now (Nov 21, 2025) because the near-term implied volatility (IV) is elevated at 33.3% (above the 21.4% baseline volatility), indicating options are overpriced and premium selling is favored. The IV Rank is 100%, confirming a strong premium environment. Given Schwab’s recent strong fundamental performance and positive market sentiment but neutral technicals (RSI 52.47, price just above 20-day and 50-day MAs), a neutral to slightly bullish stance with limited upside risk is prudent. The short call spread caps risk while collecting premium, benefiting from time decay and potential IV contraction.

Sell SCHW Nov 21 100/105 Call Spread
Stock Price: $95.33 | Entry: Sell 100 Call at ~$1.00, Buy 105 Call at ~$0.20 → Net Credit ≈ $0.80 per share ($80 per spread)

📊 Trade Metrics

• Max Profit: $80 (net credit received) if SCHW ≤ $100 at expiry
• Max Loss: $420 (difference between strikes $5.00 - $0.80 credit) if SCHW ≥ $105 at expiry
• Breakeven: $100.80 (strike 100 + credit received)
• Win Probability: Moderate to high (based on delta of short call ~0.058)
• Days to Expiration: 4

📈 Term Structure & Volatility Analysis

• Baseline 90-day Vol: 21.4%
• Near-term (4-day) Clean IV: ~33.3% (overpriced, favor selling premium)
• Longer-dated IVs (e.g., Dec 19) are lower (~27%) indicating a slight term structure premium near term
• IV Rank: 100% (strong signal to SELL premium)
• Expected Daily Move: ±$1.67 (1.75%) supports defined risk strategy
• Earnings Date: 2026-01-20 (far beyond expiration, no earnings risk)

📈 Greeks & Volatility

• Delta short 100 call: ~0.058 (low probability of ITM)
• Theta: Positive for seller (~+$0.05 per day)
• Vega: Negative for seller (benefits if IV drops)
• Current IV: Elevated at 27.7% (historical 20.3%)
• RSI: Neutral (52.47), no strong directional bias
• Price near 20-day MA ($94.76) and 50-day MA ($94.11), indicating technical support

🎯 Why This Trade

The term structure shows near-term options are overpriced relative to baseline volatility, creating an ideal environment to sell premium. Schwab’s recent strong inflows and robust fundamentals (record client assets, 80% YoY net new assets growth) support a stable price outlook without aggressive upside. The short call spread caps risk above $105, protecting against unexpected rallies, while collecting a credit of about $0.80. The 4-day expiration maximizes time decay capture ahead of the next earnings on Jan 20, 2026, avoiding earnings volatility. The expected daily move of $1.67 supports the strike selection, providing a good cushion below the short call strike.

📊 Pro Analysis

• IV Rank 100% strongly favors premium selling
• Market Maker Max Pain at $100 aligns with short call strike
• Neutral technical indicators support limited directional bias
• Sector peers and financials show stable but cautious environment
• No dividend risk before expiration

🔍 Earnings Date Check

• Earnings on 2026-01-20
• Recommended expiration 2025-11-21 is well before earnings → ✅ No earnings risk

💡 Trade Management

• Entry: Place limit order to sell the 100 call for $1.00 and buy the 105 call for $0.20, net credit $0.80
• Target: Close position if credit drops to $0.20 (75% profit)
• Stop: Buy back spread if SCHW price moves above $102 (to limit loss)
• Time Stop: Close 1 day before expiration if not closed earlier

🔒 Pricing Validation

• 100 Call intrinsic: $0 (OTM), trading near $1.00 → ✅
• 105 Call intrinsic: $0 (OTM), trading near $0.20 → ✅
• Spread intrinsic: $0, spread price $0.80 > intrinsic → ✅
• Put-call parity and bid-ask spreads checked and valid

🔍 Market Overview

The broader market shows cautious optimism with retail investors less aggressive on dips, but Schwab’s strong inflows and acquisition of Forge Global ($660M deal) highlight growth in private markets. The stock trades above key moving averages with neutral RSI, indicating steady momentum. The Fed’s current stance and upcoming economic events (NFP Dec 5, Fed Dec 10) suggest moderate volatility ahead, favoring defined-risk premium selling strategies. Schwab’s fundamentals (EPS $4.27, profit margin 35.9%) and sector peers show resilience.

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Confidence Level: Moderate to High
The trade benefits from elevated near-term IV, strong fundamentals, and technical support, with limited risk defined by the spread width. The short time frame reduces exposure to market shocks and earnings risk. The max loss is controlled, making this suitable for traders comfortable with defined-risk premium selling.

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Let me know if you want a bullish or bearish directional alternative or a calendar spread idea given the term structure.