How To YieldBoost Fred's From 1.5% To 13.1% Using Options

Shareholders of Fred's Inc. (FRED) looking to boost their income beyond the stock's 1.5% annualized dividend yield can sell the April 2015 covered call at the $17.50 strike and collect the premium based on the 75 cents bid, which annualizes to an additional 11.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.1% annualized rate in the scenario where the stock is not called away..