Strategy To YieldBoost SHLM From 2.2% To 8.1% Using Options
In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of A. Schulman, Inc., looking at the dividend history chart for SHLM below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 2.2% annualized dividend yield.
Below is a chart showing SHLM's trailing twelve month trading history, with the $40 strike highlighted in red:
The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the October covered call at the $40 strike gives good reward for the risk of having given away the upside beyond $40. (Do most options expire worthless? This and six other common options myths debunked). We calculate the trailing twelve month volatility for A. Schulman, Inc. (considering the last 252 trading day closing values as well as today's price of $35.73) to be 24%. For other call options contract ideas at the various different available expirations, visit the SHLM Stock Options page of StockOptionsChannel.com.
In mid-afternoon trading on Friday, the put volume among S&P 500 components was 952,152 contracts, with call volume at 952,152, for a put:call ratio of 0.72 so far for the day, which is above normal compared to the long-term median put:call ratio of .65. In other words, if we look at the number of call buyers and then use the long-term median to project the number of put buyers we'd expect to see, we're actually seeing more put buyers than expected out there in options trading so far today. Find out which 15 call and put options traders are talking about today.