How To YieldBoost Telephone & Data Systems To 11.6% Using Options
February 02, 2015 at 14:55 PM EST
Shareholders of Telephone & Data Systems, Inc. (TDS) looking to boost their income beyond the stock's 2.3% annualized dividend yield can sell the August covered call at the $25 strike and collect the premium based on the $1.20 bid, which annualizes to an additional 9.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.6% annualized rate in the scenario where the stock is not called away..