Enhance Your Earnings with Murphy Oil Corp’s Covered Call Strategy

Maximize Investment Returns with the $32.50 Strike Option

Shareholders of Murphy Oil Corp (Symbol: MUR) can explore an opportunity to increase their income beyond the stock’s current 4% annual dividend yield. By selling a covered call for May 2025 at the $32.50 strike price, investors can collect a premium from a bid of $1.60. This strategy could yield an additional 14.2% return relative to the current stock price, leading to a total annualized return of 18.2% if the stock remains uncalled. However, any gain above $32.50 would be forfeited if the stock price rises to that level. Notably, a 7.5% increase in MUR shares would trigger this outcome, resulting in a still impressive 12.8% return from this trade level, along with any dividend payments received prior.

Historically, dividend amounts may fluctuate based on a company’s profitability. For Murphy Oil Corp, analyzing the dividend history chart below can provide insight into the likelihood of sustaining the recent dividend, thus helping to evaluate the reasonableness of expecting a continued 4% annual yield.

The following chart depicts MUR’s trading history over the past twelve months, with the $32.50 strike price clearly marked in red:

By considering the chart above along with Murphy Oil Corp’s historical volatility, investors can better assess whether selling the May 2025 covered call at the $32.50 strike presents a favorable risk-reward scenario. Over the last 251 trading days, the trailing twelve-month volatility rate for MUR has been calculated at 28%. For further options contract ideas with various expiration dates, interested traders can check the MUR Stock Options page on StockOptionsChannel.com.

On Tuesday afternoon, trading activity indicated that in the S&P 500, there were 479,532 put contracts and 1.08 million call contracts, resulting in a put:call ratio of 0.45. This figure reflects a substantial preference for call options, as it compares to a long-term median put:call ratio of 0.65, indicating a high volume of call buying in recent trades.

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