How To YieldBoost LAD To 9.4% Using Options
July 24, 2015 at 11:35 AM EDT
Shareholders of Lithia Motors, Inc. (LAD) looking to boost their income beyond the stock's 0.7% annualized dividend yield can sell the March 2016 covered call at the $125 strike and collect the premium based on the $6.60 bid, which annualizes to an additional 8.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.4% annualized rate in the scenario where the stock is not called away..