How To YieldBoost Intuit To 3.2% Using Options

Shareholders of Intuit Inc (INTU) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the January 2019 covered call at the $170 strike and collect the premium based on the $4.40 bid, which annualizes to an additional 2.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 3.2% annualized rate in the scenario where the stock is not called away. Any upside above $170 would be lost if the stock rises there and is called away, but INTU shares would have to advance 23.7% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 26.9% return from this trading level, in addition to any dividends collected before the stock was called.