Sunstone Hotel Investors Inc (Symbol: SHO) shareholders can enhance their income by selling December covered calls at a $10 strike price, yielding an additional annualized return of 28.2% based on a 5 cents bid. Combined with the stock’s current annualized dividend yield of 3.9%, this could result in a total annualized return of 32.1% if the stock is not called away. The stock would need to rise 8.3% for the call option to be exercised, providing an 8.9% total return including dividends.
As of the latest trading session on Friday, the put volume among S&P 500 components was 1.16 million contracts, while call volume stood at 2.53 million, yielding a put-to-call ratio of 0.46. This indicates a significantly higher preference for calls compared to puts, contrasting with the long-term median ratio of 0.65.
The trailing twelve-month volatility for Sunstone Hotel Investors is calculated at 31%, based on the last 250 trading days and the current price of $9.25.
