Shareholders of Inter Parfums, Inc. (IPAR - Get Report) looking to boost their income beyond the stock's 1.7% annualized dividend yield can sell the February 2015 covered call at the $30 strike and collect the premium based on the $1.15 bid, which annualizes to an additional 14.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 16.2% annualized rate in the scenario where the stock is not called away. Any upside above $30 would be lost if the stock rises there and is called away, but IPAR shares would have to climb 4.3% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 8.3% 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 Inter Parfums, Inc., looking at the dividend history chart for IPAR 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 1.7% annualized dividend yield. Below is a chart showing IPAR's trailing twelve month trading history, with the $30 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 February 2015 covered call at the $30 strike gives good reward for the risk of having given away the upside beyond $30. ( Do most options expire worthless? This and six other common options myths debunked). We calculate the trailing twelve month volatility for Inter Parfums, Inc. (considering the last 252 trading day closing values as well as today's price of $29.04) to be 29%. For other call options contract ideas at the various different available expirations, visit the IPAR Stock Options page of StockOptionsChannel.com. In mid-afternoon trading on Wednesday, the put volume among S&P 500 components was 530,206 contracts, with call volume at 939,868, 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.
TheStreet’s Fundamentals of Investing Course will teach you the keys to making the right decisions in any market.
TheStreet’s Personal Finance Essentials Course will teach you money management basics and investing strategies to help you avoid major financial pitfalls.
TheStreet Courses offers dedicated classes designed to improve your investing skills, stock market knowledge and money management capabilities.
More from Stocks
Boeing Could Face SEC Probe Into 737 MAX Groundings: Report
Amid probes by SEC and FAA, 737 MAX planes' return to service likely delayed, reports say.
S&P 500 Support Holds, but a Third Test Would Likely Be a Different Story
While the bears have been unsuccessful so far in breaking support, the bulls have been equally lackluster in generating upside momentum.
Dow Ends Modestly Higher; Stocks Edge Up Ahead of Holiday Weekend
Stocks ended higher Friday as Wall Street heads into a long Memorial Day weekend.
2 Tailwinds Could See Investors Shop for Retail Stocks in 2019 -- ICYMI
Wage expenses and freight costs could soon abate, a big tailwind for retailers heading into the rest of 2019. Here's what investors need to know.
Beyond Pricey? Our Reporters Try the Beyond Meat Burger, Talk Business Model
Is Beyond Meat's burger enough to convince investors to invest in the company? TheStreet conducted a taste test to see what the hype is about.