Financial Services
WFC
Wells Fargo & Company
Income from Wells Fargo (WFC) with covered calls and cash secured puts. Value bank play with turnaround potential.
Monthly Premium1.5-2.5%
Annualized Return18-30%
Stock Price$58-68
IV RankModerate (30-45)
Options LiquidityExcellent
Dividend Yield2.5%
Why WFC for Covered Calls & Cash Secured Puts?
WFC offers good premium with bank sector exposure. Turnaround story as asset cap lifts. Strong dividend yield adds to total return.
Example Covered Call Trade
WFCCovered Call
Strike Price$68 (6% OTM)
Expiration30 days
Premium$1.20 per share
Return If Flat1.9% ($120)
Return If Called7.6% ($480) + dividend
Keep Probability70% keep shares
Recommended Strategy for WFC
Sell calls 5-7% OTM to capture premium plus dividend. Good for bank sector value plays.
Risks to Consider
- Regulatory issues (asset cap)
- Interest rate sensitivity
- Consumer banking competition
- Reputation challenges
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