Healthcare
MRK
Merck & Co. Inc.
Steady income from Merck (MRK) with covered calls and cash secured puts. Keytruda-driven growth with strong dividend.
Monthly Premium1.0-1.8%
Annualized Return12-22%
Stock Price$100-115
IV RankLow-Moderate (25-40)
Options LiquidityExcellent
Dividend Yield2.8%
Why MRK for Covered Calls & Cash Secured Puts?
MRK benefits from Keytruda, the best-selling cancer drug. Strong pipeline and dividend provide stability for income investors.
Example Covered Call Trade
MRKCovered Call
Strike Price$115 (5% OTM)
Expiration30 days
Premium$1.60 per share
Return If Flat1.5% ($160)
Return If Called6.3% ($690) + dividend
Keep Probability73% keep shares
Recommended Strategy for MRK
Conservative calls 4-6% OTM to supplement dividend. Good defensive pharma choice.
Risks to Consider
- Keytruda concentration risk
- Patent cliff coming
- Drug pricing pressure
- Pipeline failures
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