The Charles Schwab Corporation (Symbol: SCHW) has a current stock price of $95.25 and offers a 1.1% annualized dividend yield. Shareholders can enhance their income by selling a June 2027 covered call at the $115 strike price, which has a bid premium of $7.90, translating to an additional 4.3% annualized return. Together with the dividend, this yields a total of 5.5% annualized return if the stock is not called away.
For this stock to be called away at the $115 strike price, it would need to increase by 20.3% from its current level. Should this occur, shareholders would realize a total return of 28.6%, including dividends, prior to the stock being called.
In mid-afternoon trading on Wednesday, S&P 500 put volume was at 556,880 contracts compared to a call volume of 1.21 million contracts, indicating a put:call ratio of 0.46, which is significantly below the long-term median of 0.65, suggesting higher call buying activity among traders.
