Shareholders of Amalgamated Financial Corp (Symbol: AMAL) can potentially enhance their income by selling March covered calls at a $40 strike price, yielding a premium of $2.50. This strategy could result in an additional 45.2% annualized return on top of the current 1.8% annualized dividend yield, totaling an estimated return of 47% if the stock is not called away.
As of now, AMAL is trading at $38.02. If the stock price rises above $40, shareholders would forego any upside beyond this price but would still achieve an 11.6% return if the shares are called away, plus any dividends collected prior. Additionally, in mid-afternoon trading on Monday, the put volume among S&P 500 components reached 692,500 contracts, with call volume at 1.42 million, giving a put:call ratio of 0.49, indicating higher call preference among traders.
