How To YieldBoost World Wrestling Entertainment To 14.2% Using Options

Shareholders of World Wrestling Entertainment Inc (WWE) looking to boost their income beyond the stock's 2.4% annualized dividend yield can sell the January 2018 covered call at the $21 strike and collect the premium based on the $1.40 bid, which annualizes to an additional 11.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 14.2% annualized rate in the scenario where the stock is not called away. Any upside above $21 would be lost if the stock rises there and is called away, but WWE shares would have to climb 3.4% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 10.3% return from this trading level, in addition to any dividends collected before the stock was called.