YieldBoost Wynn Resorts To 5.2% Using Options

Shareholders of Wynn Resorts Ltd (WYNN) looking to boost their income beyond the stock's 1.5% annualized dividend yield can sell the January 2019 covered call at the $180 strike and collect the premium based on the $7.40 bid, which annualizes to an additional 3.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 5.2% annualized rate in the scenario where the stock is not called away. Any upside above $180 would be lost if the stock rises there and is called away, but WYNN shares would have to advance 35.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 41.4% return from this trading level, in addition to any dividends collected before the stock was called.