If you’re looking to generate portfolio income and benefit from price appreciation in your stock holdings, an options strategy may be the way to go. One popular method is covered call overwriting, where an investor who already owns a certain stock sells a call option against it to another investor. This strategy can provide portfolio income in the form of call premiums, while also allowing for potential appreciation if the strike price is higher than the current stock price.
At Extreme Investor Network, we believe that the key to successful covered call overwriting is choosing the right stocks to implement this strategy with. Our expert analysts have identified several call overwriting candidates from the Russell 1000, with options expiring on Aug. 16. These names are projected to see upside of at least 6% by that date and offer attractive premiums.
One stock on our radar is Constellation Energy, where Bank of America highlighted a call option with a strike price of $220. This represents a potential 16% upside from the stock’s closing price. Constellation Energy has strong fundamentals, including a recent carbon-free energy managing agreement with Microsoft and a dividend yield of 0.7%.
First Solar is another name to watch, with Bank of America pointing to a call option with a $230 strike price. Despite concerns in the clean energy sector, First Solar shares are up nearly 28% in 2024, making it a potential candidate for covered call overwriting.
Freshpet is also on our list, with Bank of America highlighting a call option with a $140 strike price. This represents a 17% upside from the stock’s closing price and comes on the heels of positive analyst sentiment and a strong performance in 2024.
For more insights on covered call overwriting and other investment strategies, visit Extreme Investor Network. Our team of experts is dedicated to helping investors maximize their portfolio returns and achieve their financial goals.