YieldBoost Windstream Holdings To 13% Using Options

Shareholders of Windstream Holdings Inc (WIN) looking to boost their income beyond the stock's 6.8% annualized dividend yield can sell the January 2018 covered call at the $10 strike and collect the premium based on the 95 cents bid, which annualizes to an additional 6.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13% annualized rate in the scenario where the stock is not called away. Any upside above $10 would be lost if the stock rises there and is called away, but WIN shares would have to advance 13.2% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 24% return from this trading level, in addition to any dividends collected before the stock was called.