Trinet Group Considers September Covered Call for Enhanced Income

Shareholders of Trinet Group Inc. (Symbol: TNET) seeking to increase their income beyond the stock’s current 1.5% annualized dividend yield can consider selling the September covered call at the $85 strike price. By doing so, they can collect a premium based on the $4.80 bid, which translates to an additional 15.7% rate of return relative to the current stock price. This strategy, referred to as YieldBoost by Stock Options Channel, could result in a total annualized rate of 17.2% if the stock is not called away. However, any upside beyond $85 would be forfeited if the stock rises to that level and is subsequently called away. Given that TNET shares would need to climb 14.4% from current prices for this to occur, shareholders would still realize a 20.9% return in cases where the stock is called, in addition to any dividends received prior to the call.

Dividends can be unpredictable and typically fluctuate with a company’s profitability. To gauge the potential for maintaining the 1.5% annualized dividend yield, investors can review Trinet Group Inc.’s dividend history chart provided below.

Additionally, the following chart illustrates TNET’s trailing twelve-month trading history, highlighting the $85 strike in red:

This chart, along with the stock’s historical volatility, provides foundational insights for deciding whether to sell the September covered call at the $85 strike. Typically, most options do expire worthless, but it is crucial to analyze the risk against potential rewards. The trailing twelve-month volatility for Trinet Group Inc., calculated using the last 250 trading day closing values and today’s price of $75.04, stands at 43%. For various other call option strategies with different expiration dates, consult the TNET Stock Options page at StockOptionsChannel.com.

On Tuesday during mid-afternoon trading, the put volume among S&P 500 components reached 750,318 contracts, while call volume hit 1.25 million. This results in a put-to-call ratio of 0.60 for the day, indicating relatively high call volume compared to puts. This suggests that buyers are favoring call options in today’s trading activity. Discover which 15 call and put options are trending today.

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