How To YieldBoost AES To 8.7% Using Options
October 22, 2018 at 11:54 AM EDT
Shareholders of AES Corp. (AES) looking to boost their income beyond the stock's 3.5% annualized dividend yield can sell the May 2019 covered call at the $16 strike and collect the premium based on the 45 cents bid, which annualizes to an additional 5.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8.7% annualized rate in the scenario where the stock is not called away..
