Shareholders of Moody’s Corp. (Symbol: MCO) seeking higher income beyond the stock’s 0.7% annualized dividend yield may consider selling the December 2025 covered call option at the $560 strike price. By doing so, they could earn a premium of $22.30, which translates to an additional 4.6% return based on the current stock price. This strategy, referred to as YieldBoost by Stock Options Channel, could provide a total annualized return of 5.3% if the stock isn’t called away. However, if MCO’s price climbs above $560, shareholders forfeit any gains beyond that point. Notably, the stock would need to rise 14.8% from current levels for that to occur. In this event, shareholders could still achieve a significant 19.4% return, along with any dividends earned before the stock is called.
Dividend payments can fluctuate based on each company’s profitability. Viewing Moody’s dividend history can assist in assessing whether the current 0.7% annualized dividend yield is sustainable.
Below is a chart delineating MCO’s trading history over the past twelve months, with the $560 strike price prominently marked in red:
This chart, alongside an analysis of historical volatility, can help investors determine if selling the December 2025 covered call option at the $560 strike is a worthwhile trade-off for potential upside beyond that price. In general, many options expire worthless, thus evaluating risk and reward is essential. Currently, Moody’s twelve-month volatility—calculated using the past 251 trading days and the current price of $487.01—is at 20%. For more options strategies and information regarding various expiration dates, visit the MCO Stock Options page on StockOptionsChannel.com.
On Wednesday afternoon, trading data revealed that put volume among S&P 500 components reached 917,141 contracts, while call volume hit 2.30 million, resulting in a put:call ratio of 0.40 for the day. This figure indicates a higher proportion of call options being traded in comparison to puts, as it is significantly lower than the long-term median put:call ratio of 0.65. This suggests that market participants are favoring call options at this time.
Top YieldBoost Calls of the S&P 500 »
Also see:
- Institutional Holders of DBAP
- GBIM Historical Stock Prices
- Funds Holding PAVE
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
