How To YieldBoost CIR To 22.6% Using Options

Shareholders of Circor International Inc (CIR) looking to boost their income beyond the stock's 0.3% annualized dividend yield can sell the February 2018 covered call at the $55 strike and collect the premium based on the $4.30 bid, which annualizes to an additional 22.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 22.6% annualized rate in the scenario where the stock is not called away. Any upside above $55 would be lost if the stock rises there and is called away, but CIR shares would have to climb 0.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 7.9% return from this trading level, in addition to any dividends collected before the stock was called.