YieldBoost SKT From 3.3% To 58.6% Using Options

Shareholders of Tanger Inc (SKT) looking to boost their income beyond the stock's 3.3% annualized dividend yield can sell the January covered call at the $37 strike and collect the premium based on the 5 cents bid, which annualizes to an additional 55.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 58.6% annualized rate in the scenario where the stock is not called away. Any upside above $37 would be lost if the stock rises there and is called away, but SKT shares would have to advance 12% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 12.1% return from this trading level, in addition to any dividends collected before the stock was called.