Shareholders of Interdigital Inc (IDCC) can enhance their income by selling a covered call at the $500 strike for December 2026, potentially earning a premium of $24.50. This premium can provide an annualized return of 7.7%, culminating in a total annualized return of 8.6% if the stock remains uncalled. Currently, IDCC shares are priced at $328.37, indicating a 53% increase is needed for the stock to be called at $500, resulting in a total return of 60.4% including dividends collected before the option’s expiration.
Interdigital’s historical dividend yield is 0.8%, but dividends are inconsistent and linked to profitability. The company’s trailing twelve-month volatility is calculated at 40%, based on the last 249 trading days. Potential investors are encouraged to analyze dividend history and trading patterns to assess the risks and rewards associated with the covered call option.
