YieldBoost OPY From 2.6% To 23.4% Using Options

Shareholders of Oppenheimer Holdings Inc (OPY) looking to boost their income beyond the stock's 2.6% annualized dividend yield can sell the June covered call at the $17.50 strike and collect the premium based on the $1.15 bid, which annualizes to an additional 20.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 23.4% annualized rate in the scenario where the stock is not called away. Any upside above $17.50 would be lost if the stock rises there and is called away, but OPY shares would have to advance 3.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 10% return from this trading level, in addition to any dividends collected before the stock was called.