YieldBoost FRED From 2.7% To 18.3% Using Options

Shareholders of Fred's Inc. (FRED) looking to boost their income beyond the stock's 2.7% annualized dividend yield can sell the January 2017 covered call at the $10 strike and collect the premium based on the 35 cents bid, which annualizes to an additional 15.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 18.3% annualized rate in the scenario where the stock is not called away..