Shareholders of Arbor Realty Trust Inc (ABR) can enhance their income by selling the October covered call at the $11 strike, collecting an 80 cents premium, which translates to an annualized return of 21.6%. This could yield a total of 33% annualized if the stock, currently priced at $10.52, is not called away. For shares to be called, a price increase of 5.9% is required, resulting in a 13.6% return if shares are called before dividends.
As of mid-afternoon trading on Monday, the S&P 500 saw a put volume of 905,283 contracts and call volume at 1.60 million, yielding a put:call ratio of 0.57. This indicates a preference for calls among traders relative to the long-term median ratio of 0.65.
