How To YieldBoost SunCoke Energy From 2.1% To 17.3% Using Options

Shareholders of SunCoke Energy Inc (SXC) looking to boost their income beyond the stock's 2.1% annualized dividend yield can sell the December covered call at the $15 strike and collect the premium based on the $1.05 bid, which annualizes to an additional 15.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 17.3% annualized rate in the scenario where the stock is not called away. Any upside above $15 would be lost if the stock rises there and is called away, but SXC shares would have to climb 6.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 13.9% return from this trading level, in addition to any dividends collected before the stock was called.