YieldBoost LM From 1.3% To 6.4% Using Options
October 21, 2014 at 11:36 AM EDT
Shareholders of Legg Mason, Inc. (LM) looking to boost their income beyond the stock's 1.3% annualized dividend yield can sell the May 2015 covered call at the $55 strike and collect the premium based on the $1.45 bid, which annualizes to an additional 5.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 6.4% annualized rate in the scenario where the stock is not called away..