YieldBoost California Water Service Group To 1492% Using Options

Shareholders of California Water Service Group (CWT) looking to boost their income beyond the stock's 2.1% annualized dividend yield can sell the May covered call at the $70 strike and collect the premium based on the $6.50 bid, which annualizes to an additional 1489.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 1492% annualized rate in the scenario where the stock is not called away. Any upside above $70 would be lost if the stock rises there and is called away, but CWT shares would have to climb 31.9% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 44.1% return from this trading level, in addition to any dividends collected before the stock was called.