Shareholders of Cognex Corp (Symbol: CGNX) can enhance their income by selling the November covered call at the $80 strike, potentially earning an annualized return of 24.4%. This figure includes the stock’s current 0.5% annualized dividend yield and a premium of $5.70 per contract. For CGNX shares to be called away, the stock must increase by 22.4% from its current price of $65.48, resulting in an overall return of 31.1% if that occurs.
As of mid-afternoon trading on Friday, the S&P 500 components showed a put volume of 3.08 million contracts and call volume at 6.56 million, resulting in a put:call ratio of 0.47, indicating a preference for call options in today’s trading activity compared to the long-term median ratio of 0.65.
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