BofA highlights ten stock options overwriting possibilities
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Market participants that are in search for further premiums on a long stock position may choose to evaluate a handful of covered calls strategies, according to members of BofA's equity derivatives team.
BofA equity-linked analyst Gonzalo Asis highlighted in an investor note: âThe strategy is best suited for names the call seller has a neutral short-term view on, as a call sells the right to upside participation beyond the call strike for a fee.â
Furthermore, the note continued with: âOverwriting outperforms a long-only position if the underlying stock declines, but if the stock rises, it can underperform if the call strike is not sufficiently high. Investors concerned about missing out on the upside when overwriting may wish to consider the following candidates within the Russell 1000 that allow at least 8% gain by 18-Nov-2022, earn a minimum premium of 6%, and have underlying notional option volume of at least $5mn.â
See BofAâs top 10 overwriting candidates, which all have options expiration dates of November 18, 2022:

Exact Sciences (EXAS), options strike price $32.5, call bid $3.60, call and dividend premium 11.2%, call-away return 12.7%.
Penn Entertainment (PENN), $30, $2.02, 6.9%, 10%.
Range Resources (RRC), $28, $1.70, 6.3%, 6.9%.
Freshpet (FRPT), $55, $4.10, 7.6%, 9.5%.
MercadoLibre (NASDAQ:MELI), $830, $68.20, 8.3%, 9.5%.
SentinelOne, Inc. (S), $23, $1.75, 7.7%, 9.1%.
Wynn Resorts, Limited (NASDAQ:WYNN), $57.5, $3.75, 6.7%, 9.1%.
Expedia Group, Inc. (NASDAQ:EXPE), $95, $6.30, 6.8%, 8.8%.
APA (APA), $42.5, $2.57, 6.2%, 8.6%.
Baidu, Inc. (NASDAQ:BIDU), $95, $6.30, 6.7%, 8.4%.


Learn more on how call options work.