How To YieldBoost HBT Financial From 4.1% To 53.4% Using Options

Shareholders of HBT Financial Inc (HBT) looking to boost their income beyond the stock's 4.1% annualized dividend yield can sell the April covered call at the $22.50 strike and collect the premium based on the 10 cents bid, which annualizes to an additional 49.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 53.4% annualized rate in the scenario where the stock is not called away. Any upside above $22.50 would be lost if the stock rises there and is called away, but HBT shares would have to climb 21.5% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 22% return from this trading level, in addition to any dividends collected before the stock was called.