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CVS Health Corporation (Symbol: CVS) shareholders can enhance their income by selling a covered call option at the $105 strike for January 2028, collecting a premium of $5.25, which annualizes to an additional 3% return on top of the current 3.5% dividend yield. If the stock is called, shareholders could earn a total return of 43.8%, assuming a 37% increase in share price from the current level of $76.84.
As of mid-afternoon trading on Wednesday, the S&P 500 saw a put volume of 830,744 contracts and call volume of 2.16 million, resulting in a put:call ratio of 0.39, indicating a strong preference for calls compared to the long-term median ratio of 0.65.
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