Boosting Income with Cracker Barrel’s Options Strategy
Investors in Cracker Barrel Old Country Store Inc. (Symbol: CBRL) may find a way to enhance their income beyond the stock’s current 1.9% dividend yield. By selling a January 2026 covered call at the $60 strike price, they can earn a premium of $9.10. This premium translates to an additional 16.3% return, making the total potential annualized rate 18.2% if shares are not called away.
However, if the stock price rises above $60, any gains beyond that point would not be realized. Currently, CBRL shares would need to increase by 16.1% for this scenario to occur. Should the shares be called, shareholders would still enjoy a combined return of 33.7%, which includes their dividends collected before the call.
Dividend Stability: Understanding the Risks
Dividend payments can fluctuate and are closely tied to a company’s profitability. Reviewing Cracker Barrel’s dividend history chart below may assist investors in gauging whether the recent dividend is sustainable, thereby aiding in the expectation of a 1.9% annualized yield.
Analyzing CBRL’s Trading Patterns
Below is the chart depicting CBRL’s trailing twelve-month trading activity, marked with the $60 strike price in red:
Utilizing both the trading chart and CBRL’s historical volatility can help investors determine whether engaging in the January 2026 covered call at the $60 strike is financially beneficial. Currently, the trailing twelve-month volatility for Cracker Barrel, based on the last 251 trading days and the present stock price of $51.97, stands at 49%. For more options-related ideas across varying expiration dates, visit the CBRL Stock Options page on StockOptionsChannel.com.
Market Sentiment: Call Options Usage
On Tuesday afternoon, trading data revealed a put volume of 1.37 million contracts among S&P 500 components, while call volume reached 2.68 million. This results in a put-to-call ratio of 0.51 for the day, indicating significantly higher call volume compared to puts. This trend suggests that traders are currently favoring calls in their options trading activities.
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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.
