BXP Inc Offers Attractive Covered Call Strategy for Investors

A report details a lucrative covered call strategy for BXP Inc shareholders, presenting a potential total annualized return of 10.9%. The strategy hinges on the stock's current performance and historical volatility, making it a viable option for boosting shareholder income.

Date: 12-11-2024

AI Rating: 7

BXP Inc. (Symbol: BXP) shareholders can boost their income by engaging in a covered call strategy, which entitles them to a premium of $5.80 on a strike price of $92.50. This translates to an annualized rate of return of 6.1%, cumulatively offering a 10.9% yield if the stock doesn't get called away.

However, if the stock rises above the strike price of $92.50, shareholders risk missing out on further gains. Specifically, BXP shares must increase by 14.3% from their current price of $80.84 for this to occur, leading to an impressive 21.5% return, including dividends, for those who have their stocks called.

The report also notes that dividends are not consistently predictable and tend to fluctuate with overall profitability. BXP's dividend history will be crucial in determining the sustainability of its 4.8% annualized dividend yield.

Another key point discussed is the stock's historical volatility, calculated at 34%. This factor adds a layer of context for investors weighing the risks associated with opting for a covered call at that specific strike price.

The broader market sentiment is also present in the report, mentioning a high call volume compared to puts in the S&P 500 components, with a put:call ratio of 0.46 indicating bullish tendencies among options traders today.

Stocks: BXP