Earn 10% On ORLY Stock By Selling Upside You Might Not Miss

Here's how to get paid a guaranteed cash income on your O'Reilly Automotive shares right now, which you keep no matter what, in exchange for capping your gains above a higher price.

O'Reilly Automotive (ORLY) is a textbook case of a great business whose stock has gone sideways, currently trading about 17% below its 52-week high and lagging the broader market. For shareholders sitting on a quality name that's taking a breather, this sets up a strong question: instead of just waiting for the next leg up, what if you could get paid a meaningful cash income right now? There's a straightforward options trade designed for exactly this moment, and its mechanics are laid out below.

10% annualized income on ORLY shares you already own, with 11% of upside, by selling a covered call.

• You own (or buy) 100 shares of ORLY near today's price of $89.76.
• Sell one call option on ORLY expiring 6/17/2027, with a strike price of $100, about 11% above today.
• Collect roughly $785 in premium up front per contract (each contract covers 100 shares), which you keep no matter what the stock does.
• That premium is about 10.1% annualized on the $8,976 of stock - income you earn just for holding.
• If ORLY finishes above $100, your shares are called away at $100. Counting the premium, your total return works out to about 23% annualized, but you give up any gains above the strike.

Called Away Or Not, You Pocket The Premium

If ORLY finishes below $100 on 6/17/2027, the call expires worthless, and you keep the full $785 premium and all your shares. That is about 8.7% over 318 days, income earned just for holding, and you are free to sell another call.

If ORLY finishes above $100, your 100 shares are called away at $100. You still keep the $785 premium, and counting it your total gain works out to about 20% over the holding period (about 23% annualized), a healthy exit. The cost of the trade is that any gain above $100 is no longer yours. And if the stock instead falls, you keep the premium but still ride the shares down, cushioned only slightly.

So the whole trade comes down to one thing: how much of that upside are you really likely to give up, and would you be content to sell at that higher price?

What Upside Would You Be Handing Over?

The only real cost is that you cap your upside. So the question is, how much blue sky are you actually giving up? The bull case for O'Reilly is potent and centers on its professional business, which serves auto repair shops. That segment is firing on all cylinders, with management noting it grew sales by 10% in the second quarter, its "fourth consecutive quarter of double-digit comps". If that momentum continues to compound, the stock could certainly climb well past your exit price, leaving you with a solid return but a dose of seller's remorse.

On the other hand, there are clear signs the easy gains might be over. The biggest tailwind, inflation, is fading fast. Management projects the benefit from price hikes will moderate to just 1% to 2% in the back half of 2026, down from a recent 5.5% boost. At the same time, the do-it-yourself side of the business is showing some strain, with transaction counts falling by low single digits. If you believe those pressures will keep a lid on the stock's near-term potential, then collecting a guaranteed income to agree to sell at a higher price looks like a pretty sharp move. For investors who like the auto parts theme but want diversified exposure can look at a consumer discretionary ETF.

Ultimately, the decision comes down to whether you think the strength in the professional segment can outrun the dual pressures of decelerating inflation and a softer DIY consumer. The one number to watch is the company's full-year comparable store sales growth. Management recently raised its guidance to a range of 4% to 6%, and where the company lands within that band will tell you a lot about whether capping your upside was the right call.

What Income Could Your Own Stocks Pay?

You may not own ORLY, but you almost certainly own something that could be paying you. Our Covered Call Finder lets you type in a stock, or a few, and instantly see the income a covered call could generate on each, then dial the strike up or down with a slider to balance more income against more upside. It is the quickest way to see what the names in your own portfolio could pay.

One Name, One Theme, Or The Whole Market

There is a ladder here. A covered call earns income on one company. A sector fund spreads that across one theme. Neither escapes the risk that a single industry hits a rough patch. The next rung is a core built across every sector, so the whole thing never rides on one bet.

The Trefis High Quality (HQ) Portfolio is that rung: about 30 quality businesses across sectors, each weighed on the full sweep of its fundamentals, sized, and rebalanced with discipline. It has a track record of outpacing a benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. Use the call for income on names you like; let a diversified, cross-sector core carry the long game.