How To YieldBoost ARKO To 35203.1% Using Options
May 21, 2024 at 11:31 AM EDT
Shareholders of ARKO Corp (ARKO) looking to boost their income beyond the stock's 2.1% annualized dividend yield can sell the August covered call at the $15 strike and collect the premium based on the $470.70 bid, which annualizes to an additional 35201% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 35203.1% annualized rate in the scenario where the stock is not called away. Any upside above $15 would be lost if the stock rises there and is called away, but ARKO shares would have to advance 167.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 8557.8% return from this trading level, in addition to any dividends collected before the stock was called.