Strategy To YieldBoost Schnitzer Steel Industries From 3.3% To 21% Using Options
October 24, 2014 at 11:30 AM EDT
Shareholders of Schnitzer Steel Industries, Inc. (SCHN) looking to boost their income beyond the stock's 3.3% annualized dividend yield can sell the February 2015 covered call at the $23 strike and collect the premium based on the $1.30 bid, which annualizes to an additional 17.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 21% annualized rate in the scenario where the stock is not called away..