Shareholders of W&T Offshore Inc (WTI) can enhance their income by selling October covered calls at a $5 strike price, potentially yielding an additional 47.1% rate of return based on a 70 cents bid, which brings the total annualized return to 48% if the stock isn’t called away. Currently, WTI shares are priced at $4.25, requiring a 17.9% increase for the shares to be called, yielding a maximum return of 34.4% from this trading level, alongside any dividends collected.
The company’s current annualized dividend yield stands at 0.9%. WTI’s trailing twelve-month volatility is calculated at 84%, providing investors with a guideline to assess risk versus reward when considering this options strategy.
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