Shareholders of Erie Indemnity Co. (Symbol: ERIE) can enhance their income by selling December covered calls at a $350 strike price for a premium of $24.20, which annualizes to an additional 14.7% return. This brings the potential total annualized return to 16.2% if the stock is not called away. Current trading levels indicate that ERIE shares would need to rise 2.3% for the calls to be exercised, providing a 9.4% return in that scenario.
As of Thursday afternoon trading, the S&P 500 saw a put volume of 950,843 contracts and a call volume of 2.14 million, resulting in a put-call ratio of 0.44, indicating relatively high call buying activity. This contrasts with the long-term median put-call ratio of 0.65.
