Exploring Income Opportunities with DigitalBridge Group’s Covered Calls

Maximize Earnings with Covered Calls on DigitalBridge Group Inc (DBRG)

Shareholders of DigitalBridge Group Inc (Symbol: DBRG) seeking to increase their income beyond the stock’s 0.4% annualized dividend yield have an option to consider. They could sell a covered call for July 2026 at a $15 strike price, taking in a premium of $1.35 per share. This strategy could yield an additional 8.9% return, leading to a potential total annualized return of 9.2%, assuming the stock is not called away. Should the stock exceed the $15 mark, those gains would be forfeited, but it would take a 42.6% increase in DBRG’s share price for that to occur. In that case, shareholders would enjoy a combined 55.4% return, not counting any dividends received prior to the stock being called.

Generally, dividends can fluctuate based on a company’s profitability, making them unpredictable. For DigitalBridge Group Inc, shareholders can reference the dividend history chart below to assess the likelihood of the recent dividend being maintained, ultimately impacting the expected 0.4% annual yield.

Below, the chart illustrates DBRG’s trailing twelve-month trading history, with the $15 strike price marked in red:

The aforementioned chart and the stock’s historical volatility serve as important tools alongside fundamental analysis. This approach helps determine if selling the July 2026 covered call at the $15 strike is worth the risk of losing potential profits above that level. Currently, the trailing twelve-month volatility for DigitalBridge Group Inc stands at 44%, based on the last 250 trading days leading up to the current price of $10.64. For more call options contract ideas across various expirations, check out the DBRG Stock Options page on StockOptionsChannel.com.

During mid-afternoon trading on Tuesday, the put volume among S&P 500 components reached 1.14 million contracts, while call volume hit 2.23 million, resulting in a put-to-call ratio of 0.51. This figure indicates notably high call trading volume relative to puts, as it is significantly lower than the long-term median ratio of 0.65, suggesting that traders are currently favoring call options.

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