Strategy To YieldBoost Rock-Tenn To 11.2% Using Options

Shareholders of Rock-Tenn Co. (RKT) looking to boost their income beyond the stock's 1.5% annualized dividend yield can sell the January 2015 covered call at the $100 strike and collect the premium based on the $4.50 bid, which annualizes to an additional 9.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.2% annualized rate in the scenario where the stock is not called away..