Explore Higher Returns with Covered Calls
Shareholders of Flagstar Financial Inc (Symbol: FLG) have a chance to enhance their income beyond the stock’s modest 0.4% annualized dividend yield. By selling a January 2026 covered call at the $15 strike price, investors can collect a premium based on the $1.00 bid, resulting in an annualized return of 7.9% against the current stock price. This strategy, referred to as YieldBoost at Stock Options Channel, could bring the total annualized return to 8.3%, assuming the stock is not called away.
If the stock price rises above $15, shareholders would miss out on potential gains past that level. However, it is worth noting that FLG shares would need to increase 41.6% for this to happen. In the scenario where the shares are called, investors would achieve a 51.1% return from this trading level, along with any dividends received prior to the call.
Dividend amounts can vary significantly based on each company’s profitability. To assess the continuity of dividends for Flagstar Financial Inc, examining the dividend history chart for FLG below can provide insight into whether the recent dividend is sustainable and if a 0.4% annualized yield is realistic.
Meanwhile, the following chart illustrates FLG’s trailing twelve-month trading history, with the $15 strike highlighted in red:
The chart, alongside the stock’s historical volatility, offers valuable insights for assessing whether selling the January 2026 covered call at the $15 strike provides a favorable risk-reward ratio. For the trailing twelve-month period, we have calculated the volatility for Flagstar Financial Inc at 146%, based on the last 251 trading day closing values and today’s price of $10.53. For additional options ideas at various expirations, visit the FLG Stock Options page on StockOptionsChannel.com.
During mid-afternoon trading on Tuesday, S&P 500 components recorded a put volume of 690,005 contracts, compared to 1.29 million call contracts, resulting in a put:call ratio of 0.54. This figure reflects a notable preference for call options among traders, especially when matched against the long-term median put:call ratio of 0.65. Buyers appear to be showing a strong interest in call options today.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
