Strategy To YieldBoost LMNR To 8.5% Using Options
February 05, 2015 at 12:09 PM EST
Shareholders of Limoneira Co. (LMNR) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the September covered call at the $22.50 strike and collect the premium based on the 95 cents bid, which annualizes to an additional 7.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8.5% annualized rate in the scenario where the stock is not called away..