Exploring Options: Boost Your Returns with PTEN’s Covered Call
Shareholders of Patterson-UTI Energy Inc. (Symbol: PTEN) aiming to increase their income beyond the stock’s 4.1% annualized dividend yield have an interesting opportunity. By selling the January 2026 covered call at the $10 strike price, investors can collect a premium of 85 cents per share. This strategy could provide an annualized return of 9.9% based on the current stock price, resulting in a potential total return of 14% annually if the stock is not called away. On the downside, any gains beyond $10 would be forfeited if the stock does rise that high. However, PTEN would need to climb 28% from its current position for that scenario to occur. If called, shareholders would ultimately enjoy a total return of 38.9%, including any dividends received prior to the call.
It’s important to note that dividend payments are often unpredictable, reflecting each company’s profitability. For Patterson-UTI Energy Inc., examining its dividend history could provide insights into the sustainability of the current 4.1% payout.
The chart below illustrates PTEN’s trailing twelve-month trading history, highlighting the $10 strike in red:
This chart, along with an analysis of PTEN’s historical volatility, serves as a valuable resource. Selling the January 2026 covered call at the $10 strike might offer a reasonable risk-reward balance. Notably, we have calculated the trailing twelve-month volatility for Patterson-UTI Energy Inc. at 41%, considering the last 250 trading days and today’s stock price of $7.79. For more options ideas at different expirations, visit the PTEN Stock Options page on StockOptionsChannel.com.
During mid-afternoon trading on Monday, the put volume among S&P 500 components reached 1.05 million contracts, while call volume was at 2.09 million, resulting in a put:call ratio of 0.50. This figure is significantly lower than the long-term median put:call ratio of 0.65, indicating that traders are favoring call options more heavily today.
Explore which 15 call and put options are trending among traders.
Top YieldBoost Calls of Stocks Conducting Buybacks »
Also see:
- Funds Holding ADHD
- TPR DMA
- PRTC market cap history
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
