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Invesco Ltd (Symbol: IVZ) is offering a potential income boost for shareholders by selling a covered call option at the $32 strike, which expires in January 2028. The current option premium is $1.70, translating to an additional 3.2% annualized return on top of the existing 3.6% dividend yield. This results in a total potential return of 6.8% annually if the stock is not called away; however, shareholders would forfeit any price appreciation beyond $32.
If the stock price were to rise 37.5% to reach the $32 strike, shareholders would achieve a total return of 44.8% from the current trading level of $23.20, inclusive of dividends received before the stock was called. Additionally, as of mid-afternoon trading on Tuesday, the put volume among S&P 500 components reached 890,419 contracts, while call volume was at 1.62 million, resulting in a put:call ratio of 0.55, indicating a preference for call options among traders.
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