How To YieldBoost CATO From 4.2% To 12.6% Using Options

Shareholders of Cato Corp. (CATO) looking to boost their income beyond the stock's 4.2% annualized dividend yield can sell the October covered call at the $30 strike and collect the premium based on the $1.15 bid, which annualizes to an additional 8.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 12.6% annualized rate in the scenario where the stock is not called away..