How To YieldBoost ANDE From 1.4% To 71% Using Options

Shareholders of Andersons Inc (ANDE) looking to boost their income beyond the stock's 1.4% annualized dividend yield can sell the May covered call at the $60 strike and collect the premium based on the 80 cents bid, which annualizes to an additional 69.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 71% annualized rate in the scenario where the stock is not called away. Any upside above $60 would be lost if the stock rises there and is called away, but ANDE shares would have to climb 14.3% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 15.8% return from this trading level, in addition to any dividends collected before the stock was called.