YieldBoost GBX From 2.2% To 18.9% Using Options

Shareholders of Greenbrier Companies Inc (GBX) looking to boost their income beyond the stock's 2.2% annualized dividend yield can sell the September covered call at the $57.50 strike and collect the premium based on the $5.20 bid, which annualizes to an additional 16.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 18.9% annualized rate in the scenario where the stock is not called away. Any upside above $57.50 would be lost if the stock rises there and is called away, but GBX shares would have to climb 6.4% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 16.1% return from this trading level, in addition to any dividends collected before the stock was called.