YieldBoost Huntsman From 3.5% To 17.9% Using Options

Huntsman Corp (HUN) is being evaluated for a covered-call income trade against a modest 3.5% annualized dividend while the stock trades near $9.99; the write-up uses the company’s dividend history and a trailing‑12‑month chart to assess whether selling the January 2027 $13 covered call offers adequate compensation given the risk of ceding upside. Trailing 12‑month volatility is high at 52%, which raises the chance of large price moves and affects option-pricing and assignment risk. In the broader options market, mid‑afternoon S&P activity showed 859,788 puts versus 1.65M calls (put:call 0.52 versus a long‑term median of 0.65), indicating unusually strong call demand, so while a covered‑call stance can boost yield, it must be balanced against elevated volatility and the potential to forfeit meaningful upside.

Analysis

Huntsman Corp (HUN) is trading at $9.99 and the write-up frames a covered-call income trade against an annualized dividend yield of roughly 3.5%, using the company’s dividend history and a trailing-12-month price chart to assess sustainability. The specific trade discussed is selling a January 2027 covered call at a $13 strike, with the primary trade-off being premium collected today versus ceding any upside above $13.

HUN’s calculated trailing 12-month volatility is 52% (based on the last 250 trading days), which implies elevated option premiums but materially higher probability of large moves and assignment risk for long-dated covered calls. High volatility increases the chance the stock moves through the $13 strike before January 2027, reducing the effective capture of both dividends and appreciation.

Market-level options flow that day showed 859,788 puts versus 1.65M calls in S&P components (put:call 0.52 versus a long-term median of 0.65), indicating unusually strong call demand and richer call pricing that can benefit covered-call sellers. Given dividends’ sensitivity to company profitability, the trade should be evaluated as an income-oriented, capped-upside strategy informed by both volatility metrics and Huntsman’s fundamental outlook.

Key Decisions for Investors

• Consider selling the January 2027 $13 covered call to boost yield only if you are willing to forfeit upside above $13 and your objective is income rather than capital appreciation
• Cap position size or use shorter-dated calls because HUN's 52% trailing volatility raises assignment and downside risk for long-dated covered-call positions
• Validate Huntsman’s near-term profitability and dividend track record before relying on a 3.5% yield, since dividends have historically tracked earnings
• If retaining upside is important, avoid long-dated covered calls and instead consider shorter expirations or buy protective puts to limit downside while preserving appreciation potential