Shareholders of Kohl’s Corp. (KSS) can enhance their income by selling covered calls on the stock. A December 2027 covered call at the $27.50 strike offers a premium of $2.97, resulting in a potential annualized return of 11.9%, when combined with the current 2.9% dividend yield, as long as the stock does not surpass $27.50. Should the stock rise by 57.8%, leading to the call being executed, shareholders would realize a total return of 74.8% from the current price of $17.39, plus any received dividends.
As of Wednesday’s mid-afternoon trading, Kohl’s stock has a trailing twelve-month volatility of 95%, and the put-call volume ratio among S&P 500 components is 0.46, indicating higher call volume relative to puts, suggesting a bullish sentiment among traders.
