Strategy To YieldBoost L From 0.5% To 4% Using Options
December 20, 2016 at 11:36 AM EST
Shareholders of Loews Corp. (L) looking to boost their income beyond the stock's 0.5% annualized dividend yield can sell the June 2017 covered call at the $50 strike and collect the premium based on the 80 cents bid, which annualizes to an additional 3.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 4% annualized rate in the scenario where the stock is not called away..