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Shareholders of Telephone & Data Systems Inc (TDS) can enhance their income by selling December 2026 covered calls at the $50 strike price, collecting a premium bid of $4.00. This strategy could yield an additional annualized return of 7.3% on top of the current 0.4% dividend yield, totaling a potential annualized return of 7.8% if the stock is not called away.
Current TDS stock price is $38.86, meaning a 27.9% increase is needed for shares to reach the strike price. If the stock gets called away, shareholders could achieve a total return of 38.1%, factoring in collected dividends.
As of Monday afternoon, the S&P 500 saw 740,222 put contracts and 1.52 million call contracts traded, resulting in a put-call ratio of 0.49, indicating significantly higher call volume than puts, a shift from the long-term median ratio of 0.65.
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