Maximizing Income with Golden Ocean Group’s Stock Options

Explore Potential Returns by Selling Covered Calls

Shareholders of Golden Ocean Group Ltd (Symbol: GOGL) seeking to increase their income, beyond the stock’s current 10.2% annualized dividend yield, can consider selling the March 2025 covered call at the $12.50 strike price. By doing so, they could collect a premium based on the 60 cents bid, translating to an annualized additional return of 14% against the stock’s current price. This strategy, referred to as the YieldBoost by Stock Options Channel, could lead to a total annualized return of 24.2%, provided the stock is not called away.

If the stock rises above $12.50, shareholders will surrender any upside gains beyond this price. However, the stock would need to appreciate by 6.2% for that to happen. Should the stock be called away, the investor would still enjoy a total return of 11.3%, combined with any dividends received until the stock was called.

It’s important to note that dividend payments can be unpredictable, often reflecting the company’s profitability. For Golden Ocean Group Ltd, reviewing the dividend history chart for GOGL can provide insight into whether the recent dividend is sustainable, thereby helping investors determine if a 10.2% annualized dividend yield is a reasonable expectation.

Below is a chart depicting GOGL’s trailing twelve month trading history, with the $12.50 strike price outlined in red:

The above chart, alongside the stock’s historical volatility, can assist in evaluating whether selling the covered call at the $12.50 strike offers acceptable rewards against the risk of giving up potential increases above this level. Current calculations indicate that the trailing twelve-month volatility for Golden Ocean Group Ltd is 37%, taking into account the last 251 trading days, along with today’s price of $11.77. For additional call options ideas, check out the GOGL Stock Options page on StockOptionsChannel.com.

In the mid-afternoon trading on Friday, the S&P 500 components saw put volume reaching 1.26 million contracts, while call volume stood at 2.31 million, resulting in a put:call ratio of 0.55 for the day. When compared to the long-term median put:call ratio of 0.65, this indicates a robust preference for call options among traders 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.