US Markets
Home›US Markets›Options›Bristol-Myers Squibb covered call strategy targets hig…
Bristol-Myers Squibb covered call strategy targets higher income yield
The options overlay discussed pairs 100 shares with a Sept. 18, 2026 call at a $70 strike, aiming to boost annualized yield from 3.9% to 24.4% if the stock stays below $70.
Yahoo Finance outlines an options-based income approach for Bristol-Myers Squibb (BMY) amid a volatile market backdrop, arguing that some investors may prefer yield generation over capital gains.
The strategy described uses a covered call, buying 100 shares at a stated cost of $6,761 and selling the September 18, 2026 call with a $70 strike, priced around $1.12 per share. Premium collected would be $112 per contract, representing about 1.7% income over 30 days, or 20.5% annualized, before factoring dividends.
The piece says covered call sellers would also receive BMY's stated $4.12 dividend, described as a 2.81% yield, and that the option premium plus dividend would raise the annualized yield from 3.9% to 24.4%, assuming the stock remains near the strike level.
It also notes the trade-off: if BMY closes above $70 at expiration, shares would be called away at $70, with a total profit of $351 combining the share move and the option premium, while a drop in the stock could erase gains from the short call premium.