YieldBoost Caleres From 0.8% To 9.7% Using Options

Shareholders of Caleres Inc (CAL) looking to boost their income beyond the stock's 0.8% annualized dividend yield can sell the February 2019 covered call at the $40 strike and collect the premium based on the $1.25 bid, which annualizes to an additional 8.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.7% annualized rate in the scenario where the stock is not called away. Any upside above $40 would be lost if the stock rises there and is called away, but CAL shares would have to advance 14.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 17.8% return from this trading level, in addition to any dividends collected before the stock was called.