Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Investment and Options Strategist
UBS has been in the spotlight recently after reporting a Q2-25 net profit of about USD 2.4 billion, more than double the result from a year earlier. The bank continues to benefit from the successful integration of Credit Suisse and strong performance in its wealth management division. With the share price trading near CHF 30–31 and just below its five-year high of CHF 32.9, long-term shareholders may be wondering how they can make their shares work harder without taking on additional risk.
One straightforward way to do this is by selling a covered call – a conservative options strategy that can generate extra income while you continue holding your UBS shares.
Think of a covered call as renting out your shares. If you own at least 100 UBS shares, you can sell a call option on those same shares. In return, you collect cash – called the premium – up front.
At expiry, one of two things happens:
It’s a conservative approach because you already own the shares – you are not taking on extra risk beyond potentially selling your shares at the strike price.
Important note: The strategies and examples described are purely for educational purposes. They assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor must conduct their own due diligence, considering their financial situation, risk tolerance, and investment objectives before making decisions. Remember, investing in the stock market carries risks, so make informed decisions.
Building-block | Detail |
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Underlying | UBS Group AG (UBSG:xvtx) |
Position assumed | 100 shares at CHF 30.78 = CHF 3 078* |
Call to sell | 15 August 2025 expiry – CHF 31.50 strike |
Premium (bid) | ~CHF 0.20 per share = CHF 20 cash today |
Income yield | CHF 20 ÷ CHF 3 078 ≈ 0.65 % in one month (about 7.8 % annualised) |
*Actual entry price will depend on the market price at the time of trade.
Scenario | UBS closing price | Outcome |
Below CHF 31.50 | Shares remain in your account | You keep your shares and the CHF 20 premium |
Above CHF 31.50 | Shares are sold at CHF 31.50 | You realise gains from CHF 30.78 → 31.50 plus the CHF 20 premium |
You can always close or roll the position before expiry if market conditions change.
Covered calls are just one way to make the most of shares you already own. In a follow-up article, we’ll explore how cash-secured puts can help you start a UBS position at a lower effective cost while also earning premium income.
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