Shareholders of Cogent Communications Holdings, Inc. (CCOI) can enhance their income by selling covered calls at the $25 strike price set to expire in January 2028, with a bid premium of $1.25. This strategy could yield an additional 9.6%, bringing the total potential annualized return to 10.5%, given the current stock price of $9.50. If the stock rises above $25, shareholders may forfeit any gains beyond that price unless the stock appreciates 167.1% from current levels, resulting in a total return of 180.4% including dividends.
As of midday trading on Wednesday, the options market saw 3.17 million put contracts compared to 6.32 million call contracts, reflecting a put-to-call ratio of 0.50, indicating a preference for calls among traders. This is significantly lower than the long-term median ratio of 0.65, suggesting bullish sentiment in the market.
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