YieldBoost TRTN To 12.3% Using Options

Shareholders of Triton International Ltd (TRTN) looking to boost their income beyond the stock's 5% annualized dividend yield can sell the January 2018 covered call at the $45 strike and collect the premium based on the $1.30 bid, which annualizes to an additional 7.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 12.3% annualized rate in the scenario where the stock is not called away. Any upside above $45 would be lost if the stock rises there and is called away, but TRTN shares would have to climb 23.8% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 27.4% return from this trading level, in addition to any dividends collected before the stock was called.