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TheStreet Open House

Interesting August Stock Options For Apple

Always important when discussing dividends is the fact that, in general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of Apple Inc, looking at the dividend history chart for AAPL below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 2.3% annualized dividend yield.

AAPL+Dividend+History+Chart

Turning to the other side of the option chain, we highlight one call contract of particular interest for the August expiration, for shareholders of Apple Inc (AAPL) looking to boost their income beyond the stock's 2.3% annualized dividend yield. Selling the covered call at the $550 strike and collecting the premium based on the $15.95 bid, annualizes to an additional 9.4% 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 11.7% annualized rate in the scenario where the stock is not called away. Any upside above $550 would be lost if the stock rises there and is called away, but AAPL shares would have to advance 4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 7.1% return from this trading level, in addition to any dividends collected before the stock was called.

START SLIDESHOW:
Top YieldBoost AAPL Calls »

The chart below shows the trailing twelve month trading history for Apple Inc, highlighting in green where the $490 strike is located relative to that history, and highlighting the $550 strike in red:

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