Shareholders of Ameriprise Financial Inc (AMP) looking to boost their income beyond the stock's 1.8% annualized dividend yield can sell the June covered call at the $115 strike and collect the premium based on the $5.40 bid, which annualizes to an additional 11.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.3% annualized rate in the scenario where the stock is not called away. Any upside above $115 would be lost if the stock rises there and is called away, but AMP shares would have to climb 0.9% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 5.6% return from this trading level, in addition to any dividends collected before the stock was called.
YieldBoost Ameriprise Financial To 13.3% Using Options
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