Analysis of OBDC Covered Call Options
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy OBDC?
Source: NASDAQ.COM
- Options Contract Overview: With OBDC stock priced at $11.48, investors can purchase shares and sell a covered call at a $12.50 strike price, potentially achieving a total return of 12.80% by the November 20 expiration, excluding dividends and commissions.
- Potential Return Analysis: At a current premium of 45 cents, if OBDC shares are called away, investors gain additional returns; however, significant upside could be missed if the stock price surges.
- Expiration Risk: Given that the $12.50 strike price is approximately 9% above the current stock price, there is a 50% chance that the covered call will expire worthless, allowing investors to retain both their shares and the premium collected.
- Yield Boost Effect: Should the option expire worthless, investors could see a 3.92% boost in returns, annualized at 5.04%, referred to as YieldBoost, highlighting the potential advantages of this options strategy.
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Analyst Views on OBDC
Wall Street analysts forecast OBDC stock price to rise
9 Analyst Rating
7 Buy
2 Hold
0 Sell
Strong Buy
Current: 11.860
Low
12.00
Averages
14.19
High
15.50
Current: 11.860
Low
12.00
Averages
14.19
High
15.50
About OBDC
Blue Owl Capital Corporation is a specialty finance company focused on lending to United States middle-market companies. The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation by targeting investment opportunities with favorable risk-adjusted returns, including senior secured, subordinated, or mezzanine loans and equity-related instruments. Its investment strategy is intended to generate favorable returns across credit cycles with an emphasis on preserving capital. It has investments in approximately 219 portfolio companies. Its portfolio by industry includes Internet software and services, insurance, food and beverage, asset-based lending and fund finance, healthcare providers and services, healthcare technology, buildings and real estate, consumer products, manufacturing, aerospace and defense, distribution, business services, and others. It is externally managed by Blue Owl Credit Advisors LLC.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Analysis of OBDC Covered Call Options
- Options Contract Overview: With OBDC stock priced at $11.48, investors can purchase shares and sell a covered call at a $12.50 strike price, potentially achieving a total return of 12.80% by the November 20 expiration, excluding dividends and commissions.
- Potential Return Analysis: At a current premium of 45 cents, if OBDC shares are called away, investors gain additional returns; however, significant upside could be missed if the stock price surges.
- Expiration Risk: Given that the $12.50 strike price is approximately 9% above the current stock price, there is a 50% chance that the covered call will expire worthless, allowing investors to retain both their shares and the premium collected.
- Yield Boost Effect: Should the option expire worthless, investors could see a 3.92% boost in returns, annualized at 5.04%, referred to as YieldBoost, highlighting the potential advantages of this options strategy.
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- Impact of Credit-Quality Fears: Business development companies have experienced a decline in their shares due to concerns over credit quality over the past year.
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Analysis of OBDC Covered Call Options
- Options Contract Overview: With OBDC stock priced at $11.48, investors can purchase shares and sell a covered call at a $12.50 strike price, potentially achieving a total return of 12.80% by the November 20 expiration, excluding dividends and commissions.
- Potential Return Analysis: At a current premium of 45 cents, if OBDC shares are called away, investors gain additional returns; however, significant upside could be missed if the stock price surges.
- Expiration Risk: Given that the $12.50 strike price is approximately 9% above the current stock price, there is a 50% chance that the covered call will expire worthless, allowing investors to retain both their shares and the premium collected.
- Yield Boost Effect: Should the option expire worthless, investors could see a 3.92% boost in returns, annualized at 5.04%, referred to as YieldBoost, highlighting the potential advantages of this options strategy.
See More
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- Investor Concerns: Private-credit stocks are facing pressure due to concerns over loans made to software companies.
- Loan Portfolio Update: Investors are eager for updates on the loan portfolios of these private-credit firms, with a key opportunity to assess them coming on Wednesday morning.
See More
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- Investment Scale: Brown University acquired 102,805 shares of Chime Financial, valued at approximately $2.59 million, reflecting confidence in the fintech platform's appeal, particularly among younger demographics.
- Target Market: Chime focuses on U.S. consumers earning under $100,000, offering low-cost mobile banking services that particularly attract college students, aligning perfectly with Brown University's investment strategy.
- Investment Background: This investment is part of Brown University's long-term endowment portfolio, aimed at supporting various institutional needs such as faculty salaries and scholarships, highlighting the university's active participation in financial markets.
- Market Outlook: Although Chime currently reports negative net income, this is common for newly public fintech firms, providing investors with an opportunity to enter early and potentially benefit from future stock price recovery.
See More
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- New Investment Position: According to a SEC filing dated January 30, 2026, Brown University initiated a new position by acquiring 102,805 shares of Chime Financial, with an estimated transaction value of approximately $2.59 million, indicating the university's interest in the fintech sector.
- Asset Allocation Impact: This investment represents 1.8% of Brown's 13F reportable assets, making it the seventh largest holding in Chime, reflecting the university's strategy for portfolio diversification.
- Market Performance Analysis: Chime Financial has a market capitalization of $9.52 billion, and while it reported a negative net income of $984.77 million, such losses are common for newly public fintech companies, necessitating investor attention on its long-term performance.
- Target Consumer Base: Brown University's investment aligns well with Chime's target demographic, primarily U.S. consumers earning under $100,000 annually, highlighting the university's focus on the young consumer market.
See More
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- Analyst Rating Overview: Benzinga provides the latest analyst ratings on high-yield stocks, allowing investors to review the latest analyses of their favorite stocks by visiting the Analyst Stock Ratings page, thereby enhancing transparency in investment decisions.
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