Strategy To YieldBoost Riley Exploration Permian To 13.7% Using Options

Shareholders of Riley Exploration Permian Inc (REPX) looking to boost their income beyond the stock's 4.7% annualized dividend yield can sell the March 2025 covered call at the $35 strike and collect the premium based on the $1.85 bid, which annualizes to an additional 9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.7% 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 REPX shares would have to climb 15.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 21.1% return from this trading level, in addition to any dividends collected before the stock was called.