Strategy To YieldBoost Arhaus From 3.9% To 25.7% Using Options

Shareholders of Arhaus Inc (ARHS) looking to boost their income beyond the stock's 3.9% annualized dividend yield can sell the May covered call at the $15 strike and collect the premium based on the 70 cents bid, which annualizes to an additional 21.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 25.7% annualized rate in the scenario where the stock is not called away. Any upside above $15 would be lost if the stock rises there and is called away, but ARHS shares would have to climb 17.7% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 23.2% return from this trading level, in addition to any dividends collected before the stock was called.