Shareholders of Tapestry Inc. (TPR) can enhance their income by selling January 2028 covered calls at a $200 strike price, collecting a premium of $10.10. This trade provides an additional annualized return of 4%, leading to a total annualized yield of 5.3%, assuming the shares are not called away. The stock would need to rise 57.6% for this to occur, resulting in a potential total return of 65.5%, including dividends, if the stock is called.
As of mid-afternoon trading on Wednesday, Tapestry’s stock price was $126.20. The trailing twelve-month volatility for TPR is calculated at 44%. In the broader market, S&P 500 put volume reached 858,771 contracts, while call volume hit 1.86 million, indicating a put-to-call ratio of 0.46, significantly below the long-term median of 0.65, suggesting a preference for call options among traders today.
