Eastman Chemical Co (Symbol: EMN) shareholders have the option to enhance their income by selling June covered calls at the $75 strike price, with a premium bid of $3.80. This strategy offers an additional annualized return of 13.3%, bringing the total potential return to 18.2% based on the current share price of $68.26. The stock must rise 9.8% to reach the strike price for shareholders to lose any upside beyond $75, resulting in a 15.4% return in the scenario where their shares are called away.
As of midday trading on Friday, the S&P 500 showed 1.40 million put contracts and 2.40 million call contracts, resulting in a put:call ratio of 0.58, indicating a preference among traders for call options relative to puts. This reflects an increased bullish sentiment in the market, as the ratio is below the long-term median of 0.65.
