Shareholders of Kohl’s Corp. (KSS) can enhance their income by selling December 2027 covered calls at a $30 strike price, potentially earning an annualized return of 11.6% when combined with the current 2.9% dividend yield. The call option, with a bid price of $2.29, has implications of an 8.8% additional return. KSS shares would need to appreciate 72.2% for this option to be exercised, which would result in an overall yield of 85.4% including dividends.
As of mid-afternoon trading on Thursday, the put volume for S&P 500 components stood at 3.54 million contracts, while call volume was at 6.08 million, resulting in a put:call ratio of 0.58. This indicates a notable preference among buyers for call options relative to puts, compared to the long-term median ratio of 0.65.
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