Shareholders of Amphenol Corp. (APH - Get Report) looking to boost their income beyond the stock's 0.8% annualized dividend yield can sell the October covered call at the $100 strike and collect the premium based on the $2.35 bid, which annualizes to an additional 8.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.3% annualized rate in the scenario where the stock is not called away. Any upside above $100 would be lost if the stock rises there and is called away, but APH shares would have to climb 2.3% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 4.7% return from this trading level, in addition to any dividends collected before the stock was called.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 Amphenol Corp., looking at the dividend history chart for APH 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 0.8% annualized dividend yield. Below is a chart showing APH's trailing twelve month trading history, with the $100 strike highlighted in red: The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the October covered call at the $100 strike gives good reward for the risk of having given away the upside beyond $100. ( Do most options expire worthless? This and six other common options myths debunked). We calculate the trailing twelve month volatility for Amphenol Corp. (considering the last 251 trading day closing values as well as today's price of $97.68) to be 18%. For other call options contract ideas at the various different available expirations, visit the APH Stock Options page of StockOptionsChannel.com. In mid-afternoon trading on Monday, the put volume among S&P 500 components was 734,588 contracts, with call volume at 1.31M, for a put:call ratio of 0.56 so far for the day. Compared to the long-term median put:call ratio of .65, that represents high call volume relative to puts; in other words, buyers are showing a preference for calls in options trading so far today. Find out which 15 call and put options traders are talking about today.
More from Stocks
When Earnings Are About 'Uncertainty' It's a Major Problem
I do think those watching for where we are in the cycle should be paying close attention this earnings season.
Stocks Wobble as Investors Digest Mixed Boeing and Caterpillar Earnings
The Dow loses earlier momentum as a Boeing boost runs dry, while Texas Instruments' earnings miss pulls down the chip sector.
Schlumberger Is Basing and Poised for a Year-End Rally
SLB and other energy names have been out of favor for a long time but now I am seeing some light at the end of the tunnel.
How Investors Should Approach Nike and Under Armour After the CEO Shuffle
What's next for Under Armour and Nike after the CEO shuffle?
TD Ameritrade CEO: We'll 'Consider' Fractional Shares As Part of 'Roadmap'
TD Ameritrade's CEO weighs in on offering fractional shares, and how TD Ameritrade is making itself stand out in the crowd.