Strategy To YieldBoost LAD To 13.6% Using Options
July 23, 2014 at 12:50 PM EDT
Shareholders of Lithia Motors, Inc. (LAD) looking to boost their income beyond the stock's 0.7% annualized dividend yield can sell the December covered call at the $100 strike and collect the premium based on the $5.10 bid, which annualizes to an additional 12.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.6% annualized rate in the scenario where the stock is not called away..