Exploring Income Opportunities with Banc Of California Inc: A Covered Call Strategy

Maximize Your Investment with a Covered Call Option

Shareholders of Banc Of California Inc (Symbol: BANC) may seek to enhance their income beyond the stock’s current 2.5% annualized dividend yield. By selling the April 2025 covered call at the $17.50 strike, investors can secure a premium of 80 cents. This translates into an annualized return of about 12.3% based on today’s stock price, which we refer to as YieldBoost. Consequently, if the stock remains uncalled, investors can expect a total annualized return of 14.8%.

Should the stock price exceed $17.50, potential gains above that strike will be forfeited. However, the stock must rise at least 8.9% from current levels to trigger this scenario. If it does, shareholders would still earn a return of 13.9% on this trade, along with any dividends before the shares are called away.

Generally, dividends can be unpredictable, fluctuating with each company’s profitability. In the case of Banc Of California Inc, examining the dividend history chart can provide insights on the likelihood of maintaining the recent 2.5% annual yield.

The chart below displays BANC’s trailing twelve months trading history, highlighting the $17.50 strike in red:

The provided chart, along with BANC’s historical volatility, can serve as a useful tool for assessing the risk versus reward of selling the April 2025 covered call at the $17.50 strike. It’s important to consider that many options end up expiring worthless, debunking several myths about options trading. Currently, the trailing twelve-month volatility for Banc Of California Inc, calculated from the last 251 trading days as well as today’s price of $15.99, stands at 42%. For information on other available call options with different expirations, check the BANC Stock Options page on StockOptionsChannel.com.

During mid-afternoon trading on Wednesday, S&P 500 options revealed a put volume of 907,833 contracts against a call volume of 1.54 million, resulting in a put:call ratio of 0.59. Compared to the long-term median put:call ratio of 0.65, this indicates a lower level of put options, suggesting that buyers lean towards calls in today’s trading atmosphere.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.