December 2026 Options Now Available For Royal Gold (RGLD)

The article details two options strategies for Royal Gold Inc (RGLD) aimed at yield enhancement or discounted share acquisition. Selling an out-of-the-money put contract on RGLD offers a potential 7.80% annualized return (YieldBoost) if it expires worthless, or an effective share cost basis of $137.60 if assigned, with a 65% probability of the former. Conversely, a covered call strategy provides a potential 7.97% annualized premium boost (YieldBoost) if the option expires worthless, or a 24.30% total return if the shares are called away, with a 50% probability of retaining the shares and premium. These strategies offer specific risk/reward profiles for RGLD investors, noting implied volatilities for both options are slightly higher than the stock's historical volatility.

Analysis

The provided text outlines two specific, yield-enhancing options strategies for Royal Gold Inc (RGLD), currently trading at $159.53 per share. The first strategy, selling a cash-secured put at the $155 strike for the December 2026 expiration, offers a way to acquire the stock at an effective cost basis of $137.60, a significant discount to the current price. There is a 65% statistical probability of this out-of-the-money put expiring worthless, which would result in a 7.80% annualized return (YieldBoost) on the cash collateral. The second strategy, a covered call at the $180 strike, offers existing shareholders a potential 24.30% total return if the shares are called away, or a 7.97% annualized yield boost if the option expires worthless, an event with a 50% probability. A key takeaway is the volatility differential: the implied volatilities of the options (33-34%) are elevated compared to the stock's trailing twelve-month historical volatility (30%), suggesting that option sellers are currently being compensated with relatively rich premiums.

Key Decisions for Investors

• For investors bullish on RGLD seeking to initiate a position, selling the $155 cash-secured put offers a dual benefit of either acquiring shares at a discounted cost basis of $137.60 or generating a 7.80% annualized yield.
• Current RGLD shareholders could consider the covered call strategy at the $180 strike to generate a 7.97% annualized income stream, but must be willing to cap their total return at 24.30% and forfeit upside beyond the strike price.