Investors holding shares in Ford Motor Co. (Symbol: F), yearning to squeeze more juice from their investment than the stock’s modest 5% annual dividend yield, can delve into the world of options trading. By selling the December 2026 covered call at the $16.82 strike price and seizing the premium based on the 95 cents bid, savvy investors can potentially amplify their returns. This strategy translates to an augmented 3.1% rate against the current stock price, which, combined with the original 5% dividend yield, culminates in an impressive 8.1% annualized return. Alas, any rise beyond $16.82 could erase potential gains if the stock is called away. But fear not, for F’s shares must ascend a lofty 39.9% from present levels for this scenario to materialize. In the event of a called stock, the shareholder would have netted a staggering 47.8% return from the initial trading level, on top of any dividends amassed prior to the stock’s potential call.

Assessing the Dividend Landscape

Dividend payouts are notorious for their capricious nature, often mirroring a company’s financial ebbs and flows. The historical dividend chart for Ford Motor Co. serves as a beacon, guiding investors in predicting the continuity of the current dividend trend. Observing this history proves beneficial in gauging the sustainability of the 5% annualized dividend yield expectation.

Analyzing Stock Performance

In the graphic below lies Ford’s trailing twelve-month trading journey, with the pivotal $16.82 strike price prominently marked in red. This visual aid, coupled with the stock’s historical volatility, acts as a compass for investors to assess the viability of selling the December 2026 covered call at the $16.82 strike. By intertwining fundamental analysis and past performance insights, investors can weigh the risk of capping potential gains beyond $16.82 against the enticing rewards.

Do most options meet a dead end? This and other conventional options myths are debunked here. Our calculation of Ford Motor Co.’s trailing twelve-month volatility, taking into account the previous 251 closing values in conjunction with today’s price of $12.01, stands at a formidable 32%. For additional call options contract suggestions across various expiration dates, peruse the F Stock Options section on StockOptionsChannel.com.

During mid-afternoon trading on a recent Thursday, the S&P 500 witnessed 887,317 put contracts exchanged, contrasted with 1.62 million call contracts, translating to a put:call ratio of 0.55. This ratio deviates significantly from the long-term median put:call ratio of .65, with calls trumping puts today, indicating a heightened preference among buyers for call options.

Discover the 15 call and put options currently buzzing in the trading sphere here.

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