Shareholders of Northrop Grumman Corp (NOC) can consider selling a September 2026 covered call at the $560 strike price to enhance income beyond the current 1.9% annualized dividend yield. This strategy could yield an additional 5.8% return based on a premium of $36.40, totaling a potential annualized rate of 7.7% if the stock is not called away. However, shareholders would lose any upside over $560, which would require a 12.6% increase from the current stock price of $496.50, resulting in a 19.9% return including dividends if the stock is called.
As of mid-afternoon trading on Wednesday, the put volume among S&P 500 components was 568,821 contracts, while call volume reached 1.12 million, yielding a put:call ratio of 0.51. This indicates significantly higher call volume relative to puts, suggesting a strong preference for calls among options traders today.
