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URI Options Strategy for 10%+ Income: A Deep Dive

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  Published in Stocks and Investing on Wednesday, January 7th 2026 at 13:37 GMT
      Locale: UNITED STATES

Unlocking Double-Digit Income: A Deep Dive into URI Options Strategies for a 10%+ Yield

The Forbes article "Options for Income: How to Get 10% Yield From URI Stock" (published January 7, 2026) details a compelling strategy for generating substantial income from United Rentals (URI) stock using options trading. It argues that, despite a relatively stable stock price, investors can significantly boost their returns beyond traditional dividends by employing a covered call strategy, and potentially, cash-secured puts. The core thesis revolves around exploiting implied volatility and the relatively predictable nature of United Rentals’ business. This summary will detail the strategy, associated risks, and a deeper look at the mechanics and considerations presented in the article and its linked resources.

The Core Strategy: Covered Calls on URI

The primary focus of the article is a covered call strategy on United Rentals. This involves owning 100 shares of URI stock and selling a call option on those shares. The investor receives a premium for selling the call option. This premium, annualized, represents the additional income earned on top of any dividends URI pays. The article specifically highlights a strategy targeting a roughly 10% annualized yield in addition to URI’s dividend (around 2.5% at the time of writing).

The key to achieving this yield lies in choosing the appropriate strike price and expiration date. The article recommends selling out-of-the-money call options – meaning the strike price is higher than the current stock price. This reduces the probability of the call option being exercised (meaning the investor would be obligated to sell their shares at the strike price), allowing them to keep the premium. The author suggests targeting strike prices around $200-$210, with monthly expirations. At the time of the article, URI was trading around $185.

The Forbes article includes a concrete example: Selling the $200 call option expiring in February for a premium of approximately $2.50 per share (or $250 per contract, given each contract represents 100 shares). Multiplying this by 12 months provides an annualized premium income of $3,000. Adding this to the existing dividend income of around $250 (assuming a $25,000 investment in URI stock) results in a total annual income of $3,250, or roughly 13% of the initial investment.

Cash-Secured Puts: An Alternative for Entering the Position

The article also touches on cash-secured puts as an alternative. This strategy involves selling a put option. If the stock price falls below the strike price at expiration, the investor is obligated to buy 100 shares of URI at that price. To cover this obligation, the investor must have sufficient cash available. Like covered calls, the investor receives a premium for selling the put option.

The benefit of this strategy is two-fold: the premium earned represents income, and if the stock price remains above the strike price, the investor keeps the premium and doesn’t have to buy the shares. The article points out that using this method allows investors to potentially acquire URI shares at a lower price than the current market value, while simultaneously earning income.

The Importance of Implied Volatility (IV)

A crucial point emphasized in the Forbes piece and explored in linked resources, particularly the Tastytrade platform mentioned, is the significance of Implied Volatility (IV). IV represents the market's expectation of future price fluctuations. High IV generally means higher option premiums, offering better income opportunities. The article notes that URI, while a relatively stable company, still experiences periods of increased IV, particularly around earnings reports. Selling options during these periods of high IV allows investors to capture larger premiums. However, the article cautions that IV can also decrease, leading to lower premiums in subsequent months.

Risks and Considerations

While the strategies offer attractive income potential, the Forbes article doesn’t shy away from outlining the inherent risks:

• Opportunity Cost: By selling covered calls, investors cap their potential upside. If URI’s stock price surges significantly above the strike price, the shares will be called away, and the investor will miss out on further gains.
• Downside Risk: Covered calls don't protect against losses if the stock price falls. The investor still bears the full risk of a declining stock price, although the premium received provides a small buffer.
• Assignment Risk: While selling out-of-the-money calls reduces the risk of assignment, it’s not eliminated. Unexpected market events could push the stock price above the strike price.
• Cash-Secured Put Risk: If the stock price plummets below the strike price, the investor is obligated to buy shares at a potentially unfavorable price.
• Early Assignment: Though rare, options can be exercised before the expiration date, creating unexpected obligations.

Beyond the Basics: Rolling Options and Adjusting Strategies

The article briefly touches on the concept of “rolling” options. This involves closing an existing option position and opening a new one with a later expiration date and/or different strike price. Rolling can be used to extend the income-generating period, adjust to changing market conditions, or manage the risk of assignment. The linked Tastytrade resources provide more in-depth instruction on these techniques.

Conclusion

The Forbes article presents a well-reasoned case for utilizing options strategies, specifically covered calls and cash-secured puts, to enhance income generation from United Rentals stock. While not without risk, the potential for a 10%+ yield on top of dividends is compelling. The key to success, according to the article, lies in understanding the nuances of options trading, carefully selecting strike prices and expiration dates, monitoring implied volatility, and being prepared to adjust the strategy as market conditions evolve. Investors are strongly advised to thoroughly research options trading and consult with a financial advisor before implementing these strategies.