Strategy To YieldBoost Tredegar From 1.6% To 19.3% Using Options
July 14, 2014 at 11:32 AM EDT
Shareholders of Tredegar Corp. (TG) looking to boost their income beyond the stock's 1.6% annualized dividend yield can sell the December covered call at the $22.50 strike and collect the premium based on the $1.70 bid, which annualizes to an additional 17.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19.3% annualized rate in the scenario where the stock is not called away..