Boise Cascade Co. (Symbol: BCC) shareholders can enhance their income by selling April covered calls at the $90 strike price, capitalizing on a premium of $3.70 per contract. This trade could yield an annualized return of 17.4%, boosting the total return to 18.4% if the stock remains below $90. However, shareholders would forfeit any gains above this strike price, requiring the stock to rise 8.8% from its current price of $82.90 for the option to be exercised, which still results in a 13.2% return from the trading level.
As of Tuesday’s mid-afternoon trading, the put volume among S&P 500 components stood at 785,316 contracts, while call volume reached 1.51 million, reflecting a put-call ratio of 0.52. This indicates a strong preference for calls, significantly above the long-term median ratio of 0.65.
The trailing twelve-month volatility for Boise Cascade is calculated at 38%, providing a metric for investors weighing the risk-reward dynamics of this trading strategy.
