How To YieldBoost NWSA From 0.7% To 13.9% Using Options

Shareholders of News Corp (NWSA) looking to boost their income beyond the stock's 0.7% annualized dividend yield can sell the July covered call at the $30 strike and collect the premium based on the $1.65 bid, which annualizes to an additional 13.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.9% annualized rate in the scenario where the stock is not called away. Any upside above $30 would be lost if the stock rises there and is called away, but NWSA shares would have to advance 2.1% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 7.7% return from this trading level, in addition to any dividends collected before the stock was called.