RTX (RTX) has surged to the top of its 52-week range, recently touching $211.28 per share after delivering a strong quarter and raising its full-year guidance.
For investors already sitting on meaningful gains in RTX, the natural question is how to manage the position intelligently going forward.
One strategy gaining attention involves converting existing RTX shares into an income-producing asset through a covered call, collecting guaranteed cash in exchange for capping future upside.
The specific trade involves owning 100 shares of RTX near the current price of $209.16 and selling one call option expiring June 17, 2027, with a strike price of $230, roughly 10% above today’s level.
Sellers of that call collect approximately $1,558 in premium per contract upfront, cash they keep regardless of what the stock does afterward.
That premium works out to roughly 8.3% annualized on the $20,916 position, representing income earned simply for continuing to hold the shares.
If RTX finishes above $230 at expiration, shares are called away at that level, but counting the premium collected, the total return works out to approximately 19% annualized.
If RTX instead finishes below $230, the call expires worthless, the investor keeps the full $1,558 premium and all shares, and is free to sell another call immediately.
The company’s fundamental backdrop makes the debate over capping upside a genuinely interesting one, given its record backlog of $289 billion providing years of revenue visibility.
The Raytheon defense segment has been particularly strong, with organic sales up 18% in the most recent quarter, driven by intense international and domestic demand for missile and air defense systems.
However, the company’s own guidance implies a meaningful deceleration in growth during the second half of 2026, with organic growth projected to slow from 13% in the first half to approximately 5%.
At the Pratt and Whitney engine division, management has been deliberately throttling new engine sales, which were down 8% in the quarter, to redirect scarce materials toward its higher-margin aftermarket repair business.
While that decision is strategically logical, it signals a company navigating real operational constraints that could weigh on near-term momentum above the $230 strike level.
For investors who would be comfortable exiting at a defined profit, collecting guaranteed income today through the premium while retaining downside exposure appears to be a calculated and defensible approach.
The critical variable to monitor is how RTX’s massive defense backlog converts into actual revenue and earnings growth, with continued strength at the Raytheon segment serving as the most important indicator.
