Investors in Umpqua Holdings Corp (Symbol: UMPQ) saw new options become available this week, for the October 18th expiration. At Stock Options Channel , our YieldBoost formula has looked up and down the UMPQ options chain for the new October 18th contracts and identified the following call contract of particular interest.
The call contract at the $17.50 strike price has a current bid of 35 cents. If an investor was to purchase shares of UMPQ stock at the current price level of $17.25/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $17.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.48% if the stock gets called away at the October 18th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if UMPQ shares really soar, which is why looking at the trailing twelve month trading history for Umpqua Holdings Corp, as well as studying the business fundamentals becomes important. Below is a chart showing UMPQ's trailing twelve month trading history, with the $17.50 strike highlighted in red:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.