Shareholders of West Pharmaceutical Services, Inc. (WST) can enhance their income by selling December covered calls at the $250 strike price, collecting a premium of $12.10, which translates to an annualized return of 12.8%. If the stock is not called away, the total potential return rises to 13.2%. However, should the stock price exceed $250, shareholders will forego any additional upside gains, having potentially earned an 18.6% return if the stock is called, plus collected dividends.
As of now, WST’s trading price stands at $221.23 with a trailing twelve-month volatility of 62%. On the broader market front, the put volume among S&P 500 components reached 555,333 contracts, while call volume hit 982,779 contracts, resulting in a put-call ratio of 0.57, indicating a higher preference for call options.
