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Regions Financial Corp (RF) shareholders can enhance their income by selling November covered calls at a $22 strike, collecting a premium of $1.65, which represents a potential additional 17.6% return on current stock prices. When combined with the existing 4.5% dividend yield, this could result in a total annualized return of 22.1%, assuming the stock is not called away.
If the stock price exceeds $22, shareholders will lose any upside beyond that price, with shares needing to rise just 0.2% to become callable. In that scenario, shareholders could still earn a 7.7% return in addition to dividends collected prior to the stock being called.
As of Wednesday, the trading volume included 568,821 put contracts and 1.12 million call contracts among S&P 500 components, displaying a put:call ratio of 0.51, significantly above the long-term median of 0.65, indicating a strong preference for call options in the market.
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