Shareholders of Cincinnati Financial Corp. (CINF) can enhance their income by selling June covered calls at a $170 strike price, collecting a premium of $4.80, which translates to an annualized return of 7.4%. This would bring the total return to 9.5% if the stock is not called away. Currently, CINF shares are priced at $160.71, indicating a 5.6% increase would be necessary for the shares to be called away.
As of Wednesday afternoon, trading data showed a put volume of 917,392 contracts and call volume of 2.14 million among S&P 500 components, resulting in a put-call ratio of 0.43. This compares with the long-term median put-call ratio of 0.65, indicating a strong preference for call options in today’s trading environment.
