YieldBoost The Gap To 4.6% Using Options
July 29, 2015 at 11:45 AM EDT
Shareholders of The Gap, Inc. (GPS) looking to boost their income beyond the stock's 2.6% annualized dividend yield can sell the January 2017 covered call at the $45 strike and collect the premium based on the $1.09 bid, which annualizes to an additional 2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 4.6% annualized rate in the scenario where the stock is not called away..