Shareholders of Xerox Holdings Corp (Symbol: XRX) can enhance their income by selling January 2028 covered calls at the $7 strike, collecting a premium of 50 cents. This strategy could yield an additional 11.2% annualized return, totaling 14.4% if the stock is not called away. However, any gains above the $7 strike would need XRX shares to appreciate 127.3% from the current price of $3.12. If the stock is called, shareholders would realize a 143.5% return from this trading level plus dividends collected before the call.
Xerox currently offers a 3.2% annualized dividend yield, though this is subject to variability based on company profitability. The trailing twelve-month volatility for XRX is calculated at 88%, which, combined with historical trading data, can help investors evaluate the risk-reward of this options strategy.
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