Shareholders of Travelers Companies Inc (TRV) can enhance their income by selling a January 2027 covered call at the $320 strike for a premium of $12.80, which yields an additional 3.1% return, resulting in a total potential income of 4.7% annualized assuming the stock is not called away. Current stock price is $265.04, indicating a 20.6% increase is necessary for the stock to be called away, yielding a combined return of 25.4% including dividends.
As of mid-afternoon trading on Wednesday, the put volume for S&P 500 components reached 568,821 contracts, while call volume stood at 1.12 million, cementing a put:call ratio of 0.51, significantly below the long-term median of 0.65. This high call volume indicates a preference among buyers for call options.
