How To YieldBoost UPBD From 4.8% To 14.1% Using Options

Shareholders of Upbound Group Inc (UPBD) looking to boost their income beyond the stock's 4.8% annualized dividend yield can sell the December covered call at the $35 strike and collect the premium based on the $1.30 bid, which annualizes to an additional 9.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 14.1% 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 UPBD shares would have to advance 12.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 16.3% return from this trading level, in addition to any dividends collected before the stock was called.