YieldBoost STI From 2% To 4.4% Using Options
February 23, 2015 at 11:28 AM EST
Shareholders of SunTrust Banks, Inc. (STI) looking to boost their income beyond the stock's 2% annualized dividend yield can sell the January 2017 covered call at the $47 strike and collect the premium based on the $1.88 bid, which annualizes to an additional 2.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 4.4% annualized rate in the scenario where the stock is not called away..