YieldBoost HFC To 6% Using Options
October 09, 2014 at 11:34 AM EDT
Shareholders of HollyFrontier Corp. (HFC) looking to boost their income beyond the stock's 3% annualized dividend yield can sell the January 2016 covered call at the $53 strike and collect the premium based on the $1.60 bid, which annualizes to an additional 3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 6% annualized rate in the scenario where the stock is not called away..