Strategy To YieldBoost Resource America From 2.6% To 10% Using Options
November 21, 2014 at 14:35 PM EST
Shareholders of Resource America Inc. (REXI) looking to boost their income beyond the stock's 2.6% annualized dividend yield can sell the June 2015 covered call at the $10 strike and collect the premium based on the 40 cents bid, which annualizes to an additional 7.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 10% annualized rate in the scenario where the stock is not called away..