Shareholders of Erie Indemnity Co. (Ticker: ERIE) can enhance their income by selling covered calls at the $320 strike price that expires in June 2026. Currently, the bid for this option is $9.10, which translates to an additional 6.6% annualized return, boosting the overall annual yield to 8.6% if the shares are not called away. Should the stock price surpass $320, shareholders would miss out on further gains, but an 11.9% increase from its current price of $285.81 would result in a total return of 15.1%, including dividends.
As of this Tuesday afternoon, the trading volume in put options for S&P 500 components stood at 682,368 contracts, while call options totaled 1.19 million, resulting in a put-to-call ratio of 0.57. This figure is notably below the long-term median of 0.65, indicating a strong preference among traders for call options at present.
