Janus Henderson Sees Opportunity In Richer Single-Stock Options Premiums

According to CNBC, Janus Henderson said investors can currently generate higher income from individual stocks than from the broader S&P 500 because implied volatility on single names has risen far more than index volatility. Portfolio manager Jeremiah Buckley said some of the market's largest companies have moved 10%, 15% or even 20% in a single day without earnings news, widening the gap between single-stock and index options premiums. Janus Henderson said the divergence has been amplified by thematic trading, flows into single-stock exchange-traded funds and semiconductor baskets, and the growth of covered-call and options-income strategies tied to the S&P 500. Buckley said active managers can use the richer premiums to write fewer calls on stocks trading below fair value, sell more calls as shares approach fair value, and reduce call writing on AI-infrastructure stocks while collecting premiums from defensive names. He added that the setup may allow managers to meet income targets with a smaller portion of the portfolio covered by options and reduce reliance on high-dividend stocks.