Amkor Technology’s Covered Call Strategy Offers Income Boost to Shareholders

Shareholders of Amkor Technology Inc. (Symbol: AMKR) can enhance their income streams beyond the stock’s current 1.7% annualized dividend yield. By selling a January 2027 covered call option at the $29.59 strike price, investors can collect a premium, currently offered at a $2.15 bid, translating into an additional 5.9% annualized return based on the current stock price. This yields a combined total of 7.6% annually, given that the stock is not called away prior to expiration.

Should the stock price exceed $29.59, any upside gains beyond this point would be forfeited. However, for the stock to be called away, it would need to rise by 48.4% from its current level. In this case, shareholders would achieve a total return of 59.2%, including dividends earned before the stock was called.

Dividend payouts can fluctuate due to company profitability and other factors. In the context of Amkor Technology Inc., analyzing the company’s dividend history can provide insights into the sustainability of the current 1.7% annualized dividend yield.

Additionally, the chart below illustrates AMKR’s trailing twelve-month trading history, with the $29.59 strike price highlighted in red:

The above charts, viewed alongside the stock’s historical volatility, help assess whether selling the January 2027 covered call at the $29.59 strike offers a favorable risk-to-reward ratio. Current analysis shows that the trailing twelve-month volatility for Amkor Technology Inc., when considering the past 249 trading day closing values alongside today’s price of $19.94, stands at 49%. For additional ideas on call options with varying expiration dates, investors can visit the AMKR Stock Options page on StockOptionsChannel.com.

During mid-afternoon trading on Monday, the put volume for S&P 500 components reached 1.04 million contracts, while call volume stood at 1.93 million contracts. This resulted in a put-to-call ratio of 0.54 for the day, indicating a strong preference for call options among investors compared to the long-term median ratio of 0.65. This suggests that buyers are leaning toward calls in today’s options trading.

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