Exploring Income-Boosting Strategies with PROG Holdings’ Stock Options
Maximizing Returns with Covered Calls at PROG Holdings Inc.
Shareholders of PROG Holdings Inc. (Symbol: PRG) have an opportunity to enhance their income beyond the stock’s annualized dividend yield of 1.1%. By selling a July 2025 covered call at the $45 strike price, investors can secure a premium, currently at a bid of $4.30. This strategy, referred to as the YieldBoost by Stock Options Channel, could yield an additional annualized return of 18.3%, resulting in a total potential return of 19.4% if the stock remains uncalled.
Should the stock rise above $45, any gains beyond that price would be forfeited. However, it is important to note that PRG shares would need to appreciate by 6.9% for this scenario to occur. If called, shareholders would still enjoy a 17.1% return from this price point, along with dividends accrued prior to the call.
Dividends are often influenced by a company’s profitability, making them difficult to predict. Reviewing the dividend history chart for PRG can provide insights into the likelihood of sustaining the current annualized yield of 1.1%.
The chart below displays PRG’s trading history over the past year, highlighting the $45 strike in red:
Analyzing this chart alongside the stock’s historical volatility can aid in determining if selling the covered call at the $45 strike price presents a favorable risk-reward scenario. The trailing twelve-month volatility for PROG Holdings Inc. stands at 41%, based on the last 251 trading days and the current stock price of $42.35. For other options trading ideas, visit StockOptionsChannel.com’s PRG Stock Options page.
During Thursday’s mid-afternoon trading session, S&P 500 options showed put volume at 709,347 contracts and call volume at 1.43 million, resulting in a put-call ratio of 0.50. This ratio is notably low compared to the long-term median of 0.65, indicating a significant preference for call options among traders.
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Also see:
- Funds Holding DRMA
- Institutional Holders of MOTI
- EXCC Insider Buying
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
