Get Paid 8.3% A Year To Hold RTX Stock You Already Own

A covered call strategy on RTX Corporation (NYSE: RTX) shares offers an immediate 8.3% annual cash yield, in exchange for agreeing to sell the stock at a price above today's. This cash income is yours to keep regardless of what the stock does.

How the Covered Call Strategy Works

The strategy involves selling a call option on RTX shares you already own. You receive an immediate cash premium and commit to selling your shares at a specified strike price if the stock rises above that level.

Potential Return

The estimated 8.3% annual yield comes solely from the option premium, which is cash you keep even if the option is not exercised. If the stock rises above the strike price, you may also gain from selling shares at a higher price.

Risks

The main risk is missing out on additional gains if the stock rises significantly above the strike price. You also still bear the downside risk of the stock.

What This Means for Investors

This strategy suits investors seeking extra income from existing holdings and who believe the stock will not rise sharply in the near term. Understand the risks before implementing.