Strategy To YieldBoost AET From 0.9% To 6.7% Using Options
May 23, 2016 at 11:43 AM EDT
Shareholders of Aetna Inc. (AET) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the January 2017 covered call at the $125 strike and collect the premium based on the $4.20 bid, which annualizes to an additional 5.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 6.7% annualized rate in the scenario where the stock is not called away..