How To Earn 13% Yield While Waiting to Buy KLAC 30% Cheaper
At about $1734.85 a share, KLA (KLAC) is trading near its 52W high.
Do you think KLAC stock is a good long-term bet at current levels? What about at a 30% discount at about $1220 per share? If you think that is a steal, and have some cash ready to go, here is a trade.
13% annualized yield at 30% margin of safety, by selling Put Options.
- Sell a long-dated Put option expiring 3/19/2027, with a strike price of $1220
- Collect roughly $10,305 in premium per contract (each contract represents 100 shares)
- That’s about 9.2% annualized yield on the $122,000 you’re setting aside for the possibility of buying the stock
- This cash parked in a savings or money market account will earn an extra 4.0%, taking total yield to 13.2%
- And you give yourself a chance to buy KLAC stock at deep discounted price of $1220
However, this is not the only stock strategy in town. Trefis High Quality Portfolio is a sophisticated framework designed to reduce stock-specific risk while giving upside exposure.
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Possible Trade Outcomes: You Win Either Way
| Stock Price Outcome | What It Means For You |
|---|---|
| KLAC stays above $1220 | You keep the full $10,305 premium – 8.4% extra income over the next 337 days on cash that might otherwise earn you 4.0% or less. You never buy the stock and simply walk away with the cash. |
| KLAC closes below $1220 | You’ll be obligated to buy 100 shares at $1220. But thanks to $10,305 premium, your effective cost basis is just $1116.95 per share – a roughly 36% discount from current level. |
But to hold this trade with conviction, you want to see long term upside in the stock. Because if it comes to it, you want to be excited about buying the stock cheap.
Check out Buy or Sell KLAC Stock and KLA Investment Highlights
If you are not comfortable with options or stock-specific trades, Portfolios are the way to go as they can protect and grow wealth even better.
Portfolios Beat Stock Picking
Stocks can jump or crash, but long-term success comes from staying invested. The right portfolio helps you ride gains and cushion single stock drops.
Beating the market consistently is hard, but the Trefis High Quality (HQ) Portfolio makes it look achievable. By selecting 30 high-conviction stocks, the HQ strategy has historically outpaced the S&P 500, S&P Mid-cap, and Russell 2000. See how this curated selection delivers superior risk-adjusted returns in our detailed performance factsheet.