Strategy To YieldBoost Alliance Fiber Optic Products To 14.2% Using Options
October 28, 2014 at 11:26 AM EDT
Shareholders of Alliance Fiber Optic Products Inc. (AFOP) looking to boost their income beyond the stock's 1.2% annualized dividend yield can sell the April 2015 covered call at the $15 strike and collect the premium based on the 80 cents bid, which annualizes to an additional 13% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 14.2% annualized rate in the scenario where the stock is not called away..