YieldBoost RPX Corp To 12.4% Using Options

Shareholders of RPX Corp (RPXC) looking to boost their income beyond the stock's 1.5% annualized dividend yield can sell the February 2018 covered call at the $15 strike and collect the premium based on the 25 cents bid, which annualizes to an additional 10.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 12.4% annualized rate in the scenario where the stock is not called away. Any upside above $15 would be lost if the stock rises there and is called away, but RPXC shares would have to climb 12.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 14.8% return from this trading level, in addition to any dividends collected before the stock was called.