Shareholders of Diversified Healthcare Trust (DHC) can enhance their income through a June 2026 covered call at a $5 strike, allowing them to collect a premium at a bid of 60 cents. This strategy could yield an annualized return of 26.3% if the stock remains below $5, while the stock price must increase by 2.5% for shares to be called away, securing a 14.8% return in that scenario, in addition to collected dividends.
As of Wednesday afternoon, DHC’s stock price was $4.88. Meanwhile, the current trading environment shows high call volume relative to puts, with 1.41 million calls and 677,356 puts traded among S&P 500 components, resulting in a put:call ratio of 0.48, indicating a strong preference for call options. This compares to a long-term median ratio of 0.65.
