YieldBoost REG To 9.4% Using Options

Shareholders of Regency Centers Corp (REG) looking to boost their income beyond the stock's 3.4% annualized dividend yield can sell the January 2018 covered call at the $65 strike and collect the premium based on the $1.25 bid, which annualizes to an additional 6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.4% annualized rate in the scenario where the stock is not called away. Any upside above $65 would be lost if the stock rises there and is called away, but REG shares would have to advance 3.1% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 5.1% return from this trading level, in addition to any dividends collected before the stock was called.