Get Paid 10.0% To Cap Your BKNG Stock At 15% Higher

For Booking shareholders, here’s a way to get paid a meaningful income now, which you keep no matter what, in exchange for capping your gains at a higher price.

Booking (BKNG) has been a frustrating hold for some investors, delivering a solid quarter but still trading about 9% below its 52-week high and having underperformed the S&P 500 over the past year. For those sitting on shares and wondering what comes next, there’s a trade that pays you a meaningful income right now for your patience, an income you collect and keep regardless of what the stock does from here.

10.0% annualized income on BKNG shares you already own, with 15% of upside room, by selling a covered call.

• You own (or buy) 100 shares of BKNG near today’s price of $209.62.
• Sell one call option on BKNG expiring 9/17/2027, with a strike price of $242, about 15% above today.
• Collect roughly $2,255 in premium up front per contract (each contract covers 100 shares), which you keep no matter what the stock does.
• That premium is about 10.0% annualized on the $20,962 of stock, income you earn just for holding.
• If BKNG finishes above $242, your shares are called away at $242. Counting the premium, your total return works out to about 24% annualized, but you give up any gains above the strike.

Either Way, The Premium Is Yours To Keep

If BKNG finishes below $242 on 9/17/2027, the call expires worthless, and you keep the full $2,255 premium and all your shares. That is about 11% over 392 days, income earned just for holding, and you are free to sell another call.

If BKNG finishes above $242, your 100 shares are called away at $242. You still keep the $2,255 premium, and counting it your total gain works out to about 26% over the holding period (about 24% annualized), a healthy exit. The cost of the trade is that any gain above $242 is no longer yours. And if the stock instead falls, you keep the premium but still ride the shares down: the premium offsets the first 11% of the decline over the holding period and nothing beyond it.

Image by Edeltravel_ from Pixabay

The Real Question: How Much Upside Is At Stake?

The trade’s only real cost is the one that matters most: you cap your upside. So, how much blue sky are you actually giving up? The bull case is that Booking’s strategic bets are just starting to pay off. Management points to its Connected Trip vision, where transactions for multi-part journeys “grew in the low double-digit range” in the last quarter, outpacing the core business. If you believe this integrated travel platform can re-accelerate growth and command a higher valuation, then capping your gains now means leaving serious money on the table.

On the other hand, a closer look at the recent results gives reason for pause. The very verticals that power that Connected Trip vision are showing signs of slowing, with flight tickets up just 4% and alternative accommodations also growing only 4%. Management also acknowledged that SEO remains under pressure across the consumer internet, a headwind for attracting direct traffic. For investors who see these as signs of a business facing tougher growth, the idea of collecting a guaranteed income now in exchange for forgoing potentially more limited gains becomes a very smart trade-off. The decision hinges on whether you see the current slowdown as a blip or a trend, which makes the growth in these slower-growing segments the one thing to watch.

See The Covered-Call Income On A Stock You Own

You may not own BKNG, but you almost certainly own something that could be paying you. Our Covered Call Finder lets you type in a stock, or a few, and instantly see the income a covered call could generate on each, then dial the strike up or down with a slider to balance more income against more upside. It is the quickest way to see what the names in your own portfolio could pay.

One step out from a single name: a consumer discretionary ETF like XLY owns the whole consumer discretionary group at once, so no single company can sink you. It still rises and falls with that one theme, which is exactly the gap the portfolio below closes.

Where This Income Trade Fits A Bigger Plan

A covered call turns one stock you own into income, but the premium and the downside still come from a single company in a single corner of the market. Durable results come from owning quality across sectors, so that no one name, and no one theme, decides how your year goes.

That is what the Trefis High Quality (HQ) Portfolio is built for: about 30 high-quality businesses spread across sectors, each chosen on the full weight of its fundamentals rather than a single setup, then sized and rebalanced with discipline. It has a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. Write calls for income on the names you like, on top of a diversified core that does not lean on any one company or theme.