Shareholders of Kohl’s Corp. (KSS) can enhance their income through a covered call strategy by selling December 2027 calls at a $30 strike price. The current bid of $1.87 translates to an annualized return of 8.7%, potentially bringing the total yield to 11.6%, assuming the stock is not called away. Given KSS’s current trading level of approximately $17.44, a price increase of 72% would result in a significant overall return of 82.7%, including dividends collected prior to the call.
As of Thursday mid-afternoon trading, the put volume among S&P 500 components was 2.42 million contracts, while call volume reached 4.11 million, giving a put-to-call ratio of 0.59. This indicates a preference for call options compared to puts, as the long-term median ratio stands at 0.65. Kohl’s trailing twelve-month volatility is assessed at 70%, which could influence options trading decisions.
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