How To YieldBoost Electro Rent Corp. To 15.9% Using Options
November 19, 2014 at 11:48 AM EST
Shareholders of Electro Rent Corp. (ELRC) looking to boost their income beyond the stock's 5.6% annualized dividend yield can sell the April 2015 covered call at the $15 strike and collect the premium based on the 60 cents bid, which annualizes to an additional 10.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 15.9% annualized rate in the scenario where the stock is not called away..