Shareholders of Cincinnati Financial Corp. (CINF) can enhance their income by selling a November covered call at the $155 strike, capturing a premium of $5.80, which translates to an annualized additional return of 11.6%. This brings the total potential annualized yield to 13.9% if the stock remains uncalled. CINF shares must rise 3.2% from the current price of $150.45 for the stock to be called away, providing a 7.1% return from the trading level in that scenario.
As of mid-afternoon trading on Tuesday, S&P 500 components displayed a total put volume of 1.01 million contracts and call volume of 1.67 million contracts, leading to a put:call ratio of 0.60. This indicates a preference among traders for call options compared to puts, in contrast to the long-term median ratio of 0.65.
