YieldBoost Fox To 9.4% Using Options

Shareholders of Fox Corp (FOX) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the July covered call at the $55 strike and collect the premium based on the $1.85 bid, which annualizes to an additional 8.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.4% annualized rate in the scenario where the stock is not called away. Any upside above $55 would be lost if the stock rises there and is called away, but FOX shares would have to climb 5.9% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 9.4% return from this trading level, in addition to any dividends collected before the stock was called.