Group 1 - The Federal Reserve cut its key federal funds rate by 0.25% to a range of 3.5%-3.75%, with projections indicating only one more cut in 2026 due to slowing job growth and persistent inflation [1] - Following the interest rate cut, stocks surged, with the S&P 500 and Nasdaq 100 reaching six-week and five-week highs, respectively [1] Group 2 - In unusual options activity, the top 25 ETF put options by volume-to-open-interest ratios showed significant interest, particularly in the iShares 7-10 Year Treasury Bond ETF (IEF) and the iShares Russell 2000 ETF (IWM) [2] - Small-cap stocks, represented by IWM, have performed strongly, with an increase of 8.15% since November 21, and an 88% outperformance compared to the SPDR S&P 500 ETF (SPY) over the same period [2] Group 3 - IWM had three active put options with volume-to-open-interest ratios above 10, indicating notable trading activity despite a bearish put/call open interest ratio of 2.44 [3] - The Jan. 16/2026 $243 strike put option for IWM had a volume of 57,033, which is 14.02 times the open interest, highlighting significant market interest [4] Group 4 - The covered strangle strategy combines a Covered Call and a Cash-Secured Put, allowing traders to generate income while managing exposure to the underlying asset [5] - This strategy is not solely focused on income generation; it also provides a systematic approach to managing exposure, allowing for increased long exposure at lower prices if the underlying asset falls, or trimming exposure and realizing gains if it rises [6][7]

Covered calls are a great strategy to add to any portfolio, and can offer enhanced yield from stock holdings, in some case, that can be a significant increase. To trade a covered call we need to own (or buy) 100 shares of a stock and then sell a call option against that stock position. More News from Barchart The goal is to generate income from the stock holding in addition to any dividends. The premium received from selling the call also covers a small decline in the stock price. However, the trade of ...

Core Insights - First Horizon (FHN), a regional bank based in Tennessee, reported reasonably strong Q3 2025 results, but the stock declined nearly 10% on the announcement, possibly reflecting the adage "Buy on rumor, sell on news" or concerns raised by JPMorgan & Chase CEO Jamie Dimon [1] - The stock price drop erased 75% of the gains for long-time shareholders in 2025, although they remain up 98% over the past five years, significantly outperforming the iShares U.S. Regional Banks ETF (IAT) [2] - FHN experienced a significant increase in options trading volume, with 173,468 contracts traded, marking the second-highest daily volume in 2025 and 5.8 times the 30-day average [2][3] Options Activity - The unusual options activity for FHN included 11 notably active options, comprising eight calls and three puts, with two trades ranking in the top 12 [3][4] - Among the eight calls, three had expiration dates around 90 days, indicating a strategic interest in short-term movements [7] Investment Strategy - A Stock Repair strategy, also known as a Covered Ratio Spread, is suggested for investors holding FHN shares, aiming to recover some or all of the original investment while not purchasing additional shares [5][6] - The strategy involves buying one ATM call and selling two calls at higher strike prices, specifically recommending a long $21 call expiring on January 16, 2026, while selling two short calls at either $22 or $28 [6][8]

Core Viewpoint - CareTrust REIT (CTRE) is a strong performer in the REIT sector, offering a 4% annual dividend yield and a 25% increase in stock price this year, making it attractive for income investors [1][5] Summary by Sections Investment Strategy - A covered call strategy can be employed to enhance income from CareTrust REIT while slightly reducing risk on a long stock position, though it limits upside potential above the strike price [2] - Buying 100 shares of CareTrust would cost approximately $3,430, and a Jan. 16, 35-strike call option is trading around $1.25, generating $125 in premium per contract, equating to a 3.8% income in under four months, or 11.9% annualized [3] Profit Potential - If CareTrust stock closes above $35 at expiration, the total profit would be $195, resulting in a 5.9% return or 18.6% annualized [3] Risk Factors - The stock may drop, potentially negating gains from selling the call, and earnings are due to be reported in late November, introducing earnings risk [4] - CareTrust's implied volatility is currently at 22.15%, with a 12-month low of 13.25% and a high of 72.44% [4] Performance Ratings - Investor's Business Daily rates CareTrust with a Composite Rating of 91, an Earnings Per Share Rating of 92, and a Relative Strength Rating of 71, ranking first in its group [5]

Group 1 - Wall Street's record-breaking rise is increasing the appeal of options strategies, particularly covered calls, for investors looking to hedge single stock risks while diversifying their portfolios [1][2] - There is a growing adoption of covered calls among individual investors, especially those with large positions in big tech stocks, baby boomers, and corporate executives with legacy holdings [2][3] - Customized covered calls are being used by advisors to help clients gradually sell out of stocks, diversify holdings, and manage taxes [3][4] Group 2 - A call option allows the buyer the right to purchase stock at a predetermined price, and the premium earned can be used to buy put options for loss protection [4] - An estimated $15 trillion of concentrated stock positions are considered suitable for covered calls and similar strategies [4][5] - The concentration in the market is significantly higher than in the past, leading to increased interest in options-based products and strategies [5] Group 3 - The S&P 500 has increased by 30% since April and is up 10% for the year, driven by advancements in AI-related technology stocks and strong performance from companies like Palantir Technologies [6] - Aptus Capital Advisors is structuring trades with shorter durations for clients' separately managed accounts (SMA), addressing risks in various individual stocks [7] - The SMA market is projected to grow from $2.75 trillion in 2024 to $3.15 trillion in 2025, indicating a rising trend in personalized investment management [8]