Turning to the other side of the option chain, we highlight one call contract of particular interest for the April expiration, for shareholders of Hewlett-Packard Co (HPQ) looking to boost their income beyond the stock's 1.8% annualized dividend yield. Selling the covered call at the $33.50 strike and collecting the premium based on the 19 cents bid, annualizes to an additional 41.9% 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 43.7% annualized rate in the scenario where the stock is not called away. Any upside above $33.50 would be lost if the stock rises there and is called away, but HPQ shares would have to climb 1.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 1.9% return from this trading level, in addition to any dividends collected before the stock was called.
One Put, One Call Option To Know About for Hewlett-Packard
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