YieldBoost VIA To 21.2% Using Options

Shareholders of Viacom Inc (VIA) looking to boost their income beyond the stock's 2.4% annualized dividend yield can sell the March 2018 covered call at the $35 strike and collect the premium based on the $1.70 bid, which annualizes to an additional 18.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 21.2% annualized rate in the scenario where the stock is not called away. Any upside above $35 would be lost if the stock rises there and is called away, but VIA shares would have to advance 3.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 8.9% return from this trading level, in addition to any dividends collected before the stock was called.