YieldBoost RF From 2.8% To 11.6% Using Options

Shareholders of Regions Financial Corp (RF) looking to boost their income beyond the stock's 2.8% annualized dividend yield can sell the November covered call at the $10 strike and collect the premium based on the 41 cents 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 11.6% annualized rate in the scenario where the stock is not called away. Any upside above $10 would be lost if the stock rises there and is called away, but RF shares would have to climb 5.6% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 9.9% return from this trading level, in addition to any dividends collected before the stock was called.