Maximizing Returns with Gen Digital Inc: A Covered Call Strategy
Enhancing Dividend Income with $28 Covered Calls
Shareholders of Gen Digital Inc (Symbol: GEN) seeking to increase their income beyond the stock’s 1.8% annualized dividend yield can consider selling the May covered call at the $28 strike price. By doing so, they could earn a premium of $1.65, which translates to an extra annualized return of 18.3% based on the current share price. This strategy, known as YieldBoost, could yield a total annualized return of 20.1% if the stock is not called away. However, if GEN shares rise above $28, any gains beyond that price may be forfeited. Currently, the stock would need to increase by 2.2% for this scenario to occur, which would still yield shareholders an 8.2% return alongside any dividends received prior to the stock being called.
Dividend payments can fluctuate, often reflecting a company’s profitability. Analyzing Gen Digital Inc’s dividend history, as depicted in the chart below, can provide insight into whether the current 1.8% annualized dividend yield is sustainable.
Understanding Stock Performance: GEN’s Recent Trading History
Displayed below is a chart illustrating GEN’s trailing twelve months of trading history, with the $28 strike clearly marked in red:
This chart, combined with an examination of historical volatility, serves as a valuable tool for evaluating whether selling the May covered call at the $28 strike is a worthwhile risk-reward tradeoff. It is important to note that most options rarely expire in the money. The last 251 trading days indicate Gen Digital Inc’s trailing twelve month volatility at 30%, calculated alongside today’s share price of $27.39. For additional ideas on call options contracts with different expiration dates, visit the GEN Stock Options page at StockOptionsChannel.com.
Current Options Market Trends
During mid-afternoon trading on Thursday, the put volume among S&P 500 companies reached 948,157 contracts, while call volume totaled 1.70 million, yielding a put:call ratio of 0.56 for the day. This level indicates higher call volume compared to put volume, suggesting that traders are favoring calls in today’s options trading.
To explore the most discussed call and put options today, check out
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- DG Price Target
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.