Understanding Covered Calls: A February 2026 Strategy for FR Stock

If you’re holding shares of First Industrial Realty Trust Inc (FR) trading around $58.95, there’s an intriguing way to potentially boost your returns using the newly available February 2026 options contracts—specifically through a covered call strategy.

How Covered Calls Work in Practice

A covered call is fundamentally straightforward: you own the underlying stock and simultaneously sell call options against it. When you sell the call contract, you immediately pocket the premium (in this case, 45 cents for the $60.00 strike). The trade-off is clear—you’re committing to sell your shares at the predetermined strike price if the buyer decides to exercise the option.

Breaking Down the February 2026 Opportunity

The $60.00 strike deserves attention because it sits approximately 2% above the current market price, positioning it as an out-of-the-money contract. Here’s the math on returns:

If you purchase FR shares at $58.95 and sell the February 2026 call at this strike, you’re looking at a potential 2.54% total return (excluding any dividends) should assignment occur at expiration. This encompasses both the appreciation to $60.00 and the 45-cent premium collected upfront.

The beauty of this play hinges on probability. Current analytical models suggest there’s roughly a 53% chance the contract expires worthless—meaning the stock stays below $60.00. In that scenario, you retain both your shares and the premium, which translates to a 0.76% yield boost on top of any long-term holding returns. Annualized, this “YieldBoost” becomes 4.35%.

Evaluating the Risk-Reward Profile

The decision ultimately depends on your outlook for FR. By selling the call, you’re capping your upside at $60.00. If First Industrial Realty Trust’s stock climbs significantly beyond that level, you’ll miss out on additional gains. Conversely, if the stock declines, the premium collected provides a modest cushion.

Current implied volatility in these options stands at 28%, while the stock’s trailing twelve-month realized volatility measures 25%. This slight premium in implied vol suggests the market is pricing in meaningful movement potential through February 2026—something worth factoring into your decision.

Before executing this covered call strategy, review FR’s twelve-month price history and underlying business fundamentals to ensure this strike price aligns with your return targets and risk tolerance.