Strategy To YieldBoost Power Integrations To 8.5% Using Options
October 30, 2017 at 11:31 AM EDT
Shareholders of Power Integrations Inc. (POWI) looking to boost their income beyond the stock's 0.7% annualized dividend yield can sell the April 2018 covered call at the $90 strike and collect the premium based on the $3.00 bid, which annualizes to an additional 7.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8.5% annualized rate in the scenario where the stock is not called away..