Strategy To YieldBoost CINF From 3.4% To 10.8% Using Options
July 29, 2015 at 11:43 AM EDT
Shareholders of Cincinnati Financial Corp. (CINF) looking to boost their income beyond the stock's 3.4% annualized dividend yield can sell the August covered call at the $55 strike and collect the premium based on the 25 cents bid, which annualizes to an additional 7.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 10.8% annualized rate in the scenario where the stock is not called away..