Turning to the other side of the option chain, we highlight one call contract of particular interest for the January 2015 expiration, for shareholders of Hewlett-Packard Co (HPQ) looking to boost their income beyond the stock's 2% annualized dividend yield. Selling the covered call at the $35 strike and collecting the premium based on the $1.26 bid, annualizes to an additional 4.9% rate of return against the current stock price (this is what we at Stock Options Channel refer to as the YieldBoost), for a total of 6.8% 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 HPQ shares would have to advance 18.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 22.6% return from this trading level, in addition to any dividends collected before the stock was called.
Interesting January 2015 Stock Options For HPQ
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