Hecla Mining Offers Potential for Higher Income Through Covered Calls

Shareholders of Hecla Mining Co (Symbol: HL) seeking to enhance their income beyond the Stock‘s current 0.3% annualized dividend yield can consider selling a January 2026 covered call at the $7 strike price. This strategy can generate a premium of 59 cents, which translates to an annualized return of 12.8%, based on the current Stock price. When combined with the existing dividend yield, this could result in a total annualized rate of 13.1% if the Stock is not called away.

However, it’s important to note that any price appreciation beyond $7 will lead to the loss of potential gains if the shares are called away. For HL shares to reach that threshold, they would need to rise 28.9% from current levels. In the event of the shares being called before their price hits $7, shareholders could still achieve a total return of 39.8%, factoring in dividends received up to that point.

Understanding Dividend Stability and History

Predicting dividend amounts can be challenging as they often correlate with a company’s profitability. For a clearer assessment of Hecla Mining Co’s dividend sustainability, it’s beneficial to examine its dividend history chart, which helps gauge whether the recent dividends are likely to continue, justifying the expectation of a 0.3% annualized yield.

The following chart illustrates HL’s trailing twelve-month trading activity, with the $7 strike price highlighted in red:

Analyzing Risk and Reward of Covered Calls

The provided charts, in conjunction with Hecla Mining’s historical volatility, can inform the decision on whether selling the January 2026 covered call at the $7 strike price is a prudent choice. Generally, many options expire worthless, so understanding the risks is crucial. Our calculation of the trailing twelve-month volatility for Hecla Mining Co indicates a level of 55%, based on the last 250 trading days’ closing prices and the current price of $5.43. For other call option contracts with various expiration dates, you can visit the HL Stock Options page on StockOptionsChannel.com.

Current Market Trends in Options Trading

As of mid-afternoon trading on Wednesday, put volume among S&P 500 components reached 1.16 million contracts, while call volume stood at 2.09 million, resulting in a put/call ratio of 0.56 for the day. This indicates a higher call volume relative to puts compared to the long-term median put/call ratio of 0.65, suggesting that buyers are favoring call options in today’s trading environment.

To discover which 15 call and put options traders are discussing today, find out more.

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