For owners of this high-flying industrial stock, here is a way to get paid a meaningful income now, which you keep no matter what, in exchange for capping your gains at an even higher price.
Trane Technologies (TT) has been on a tear, climbing +21.9% in three months to trade just shy of its all-time high. The engine here is a gusher of new business, with the company sitting on a record backlog after posting what it called "exceptional" new orders. For shareholders who've enjoyed the ride, it raises a question: what if you could get paid a meaningful income right now, an income you keep no matter what, just for agreeing to sell your shares at an even higher price down the road?
11% annualized income on TT shares you already own, with 9.9% of upside room, by selling a covered call.
You own (or buy) 100 shares of TT near today's price of $491.16.
Sell one call option on TT expiring 1/15/2027, with a strike price of $540, about 9.9% above today.
Trane Technologies (TT) has been on a tear, climbing +21.9% in three months to trade just shy of its all-time high. The engine here is a gusher of new business, with the company sitting on a record backlog after posting what it called "exceptional" new orders. For shareholders who've enjoyed the ride, it raises a question: what if you could get paid a meaningful income right now, an income you keep no matter what, just for agreeing to sell your shares at an even higher price down the road?
11% annualized income on TT shares you already own, with 9.9% of upside room, by selling a covered call.
You own (or buy) 100 shares of TT near today's price of $491.16.
Sell one call option on TT expiring 1/15/2027, with a strike price of $540, about 9.9% above today.
1 month ago
