Shareholders of Littelfuse Inc (NASDAQ: LFUS) can enhance their income by selling December covered calls at the $240 strike, collecting a premium of $15.10, offering a potential annualized return of 14.9%, which includes the current dividend yield of 1.3%. If LFUS shares are called away after reaching the $240 strike, shareholders would realize a total return of 15.8%, assuming an 8.9% price increase from the current level of $220.49.
The trailing twelve-month volatility for Littelfuse Inc is calculated at 41%, highlighting the potential risks associated with this covered call strategy. In broader S&P 500 trading, as of Wednesday afternoon, there were 568,821 put contracts and 1.12 million call contracts, resulting in a put:call ratio of 0.51, indicating a preference for calls among traders.
