Strategy To YieldBoost ETH From 1.7% To 10.4% Using Options
February 06, 2015 at 11:45 AM EST
Shareholders of Ethan Allen Interiors, Inc. (ETH) looking to boost their income beyond the stock's 1.7% annualized dividend yield can sell the August covered call at the $30 strike and collect the premium based on the $1.30 bid, which annualizes to an additional 8.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 10.4% annualized rate in the scenario where the stock is not called away..