Shareholders of Entergy Corp (ETR) have the opportunity to enhance their income by selling a December covered call at an $85 strike price, collecting a premium of $3.80, which could yield an additional 9.3% return. This results in a total annualized return of 12.3% if the stock is not called away. Entergy’s shares need to rise 5.2% from the current price of $80.94 for the stock to be called, offering a 9.9% return from this trading level, plus dividends.
As of Wednesday mid-afternoon trading, S&P 500 put volume was 568,821 contracts while call volume reached 1.12 million, resulting in a put:call ratio of 0.51. This high call volume relative to puts indicates strong buyer preference for calls during options trading.
