Strategy To YieldBoost Shoe Carnival From 1.1% To 20.2% Using Options
February 19, 2015 at 11:46 AM EST
Shareholders of Shoe Carnival, Inc. (SCVL) looking to boost their income beyond the stock's 1.1% annualized dividend yield can sell the March covered call at the $25 strike and collect the premium based on the 35 cents bid, which annualizes to an additional 19.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 20.2% annualized rate in the scenario where the stock is not called away..