YieldBoost Southern Copper Corp From 2.4% To 11.7% Using Options

Shareholders of Southern Copper Corp (SCCO) looking to boost their income beyond the stock's 2.4% annualized dividend yield can sell the June 2018 covered call at the $45 strike and collect the premium based on the $2.05 bid, which annualizes to an additional 9.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.7% annualized rate in the scenario where the stock is not called away. Any upside above $45 would be lost if the stock rises there and is called away, but SCCO shares would have to climb 6.6% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 11.4% return from this trading level, in addition to any dividends collected before the stock was called.