December 17, 2024

Ron Finklestien

Maximize Returns: Achieve a 10.4% Yield Boost on Teekay Tankers with Options Strategies

Maximizing Income: Teekay Tankers Ltd Offers Profitable Options for Shareholders

Explore strategies to enhance returns with Teekay Tankers’ covered calls

Shareholders of Teekay Tankers Ltd (Symbol: TNK) seeking to increase their income beyond the stock’s 2.7% annual dividend yield might consider selling the November 2025 covered call at the $45 strike. By doing so, they can collect a premium of $2.60, which translates to an additional 7.7% annual return based on the current stock price. When this is combined with the dividend yield, shareholders could achieve a total annualized return of 10.4%, assuming the stock is not called away. However, if TNK shares appreciate beyond $45, shareholders would miss out on any additional gain. To be called away, the stock would need to rise 24.1%, which, in turn, would result in a total return of 31.2% from this trading point, along with any dividends received prior to the stock being called.

Stock dividends can be unpredictable and often fluctuate with a company’s profitability. For Teekay Tankers Ltd, reviewing the dividend history chart for TNK below may provide insight into whether the recent dividend is sustainable and if the 2.7% yield is a realistic expectation.

TNK Dividend History Chart

A chart displaying TNK’s trailing twelve-month trading history follows, with the $45 strike clearly marked in red:

Loading chart — 2024 TickerTech.com

The charts presented, alongside the stock’s historical volatility, serve as valuable tools when analyzing whether selling the November 2025 covered call at the $45 strike offers an acceptable reward for the risk of ceding any gains above this level. The trailing twelve-month volatility for Teekay Tankers, utilizing the last 251 trading days as well as today’s price of $36.80, is calculated at 34%. Shareholders interested in different call options can visit the TNK Stock Options page at StockOptionsChannel.com for further options trading ideas.

During mid-afternoon trading on Tuesday, the S&P 500 components’ put volume reached 1.37 million contracts, while call volume stood at 2.68 million contracts, yielding a put:call ratio of 0.51. This indicates significantly higher call volume in relation to puts compared to the long-term median put:call ratio of 0.65, suggesting that traders are favoring call options today.

Top YieldBoost Calls of the S&P 500 »

Also see:
  • Funds Holding IBIB
  • DSGT Insider Buying
  • Institutional Holders of SBNY

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


Subscribe to Pivot and Flow Daily