Shareholders of Packaging Corp of America (PKG) can enhance their income by selling a covered call at the $210 strike expiring in July 2026. The current bid for this call option is $11.90, which translates to an annualized rate of return of 10.1%, bringing the total potential yield to 12.6% if the stock is not called away. The stock, currently priced at $201.36, would need to rise by 3.8% for the option to be exercised, which would yield a 9.7% return in addition to collected dividends.
As of mid-afternoon trading on Wednesday, the put volume among S&P 500 components stood at 859,788 contracts, while call volume reached 1.65 million, resulting in a put-to-call ratio of 0.52. This indicates a high preference for call options relative to puts, compared to the long-term median ratio of 0.65.
