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