YieldBoost Duke Energy Corp To 10.4% Using Options

Shareholders of Duke Energy Corp (DUK) looking to boost their income beyond the stock's 4.4% annualized dividend yield can sell the April 2015 covered call at the $72.50 strike and collect the premium based on the $2.90 bid, which annualizes to an additional 6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 10.4% annualized rate in the scenario where the stock is not called away. Any upside above $72.50 would be lost if the stock rises there and is called away, but DUK shares would have to climb 0% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 4% return from this trading level, in addition to any dividends collected before the stock was called.