Maximizing YieldBoost IVZ: A Step-by-Step Guide to Increasing Returns from 4.4% to 10.7% with Options

Published On: December 10, 2024 1:56 pm

Maximize Your Income: Explore Invesco Ltd’s Covered Call Opportunities

Discover the Potential of the July 2025 $21 Strike Call Option

Investors in Invesco Ltd (Symbol: IVZ) have an opportunity to enhance their income beyond the company’s 4.4% annualized dividend yield. By selling a covered call option for July 2025 at the $21 strike price, shareholders can potentially earn an additional 6.3% return, based on a current bid of 70 cents. If the stock price remains below $21, this could sum to a total annualized return of 10.7%. However, if IVZ shares exceed the $21 mark, the upside would be capped. Currently, the stock must increase by 13.2% for this scenario to occur. Should the stock be called, the overall return including dividends could reach 17% from this trading point.

Dividends can vary based on a company’s profitability, which makes understanding a company’s dividend history essential. Analyzing the dividend history chart for IVZ can offer insights into the sustainability of the current 4.4% yield.

IVZ Dividend History Chart

Below is a chart that highlights IVZ’s trading history, with the $21 strike depicted in red:

IVZ Trading Chart

The chart, alongside the stock’s historical volatility, can help investors weigh the benefits and risks of selling the July 2025 covered call option at $21. An important aspect of options trading is understanding that many options expire unused, which clarifies the risks involved. The trailing twelve-month volatility for Invesco Ltd is calculated at 31%, factoring in the last 251 trading days as well as the recent price of $18.59. For additional call option strategies at various expirations, visit the IVZ Stock Options page on StockOptionsChannel.com.

During mid-afternoon trading on Tuesday, the put volume for S&P 500 components stood at 903,301 contracts, with call volume reaching 2.42 million. This resulted in a put-to-call ratio of 0.37, indicating significantly higher call trading relative to puts compared to the long-term median of 0.65, suggesting that traders favor call options today.

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