YieldBoost Antero Midstream Corp From 20.3% To 25.4% Using Options

Shareholders of Antero Midstream Corp (AM) looking to boost their income beyond the stock's 20.3% annualized dividend yield can sell the January 2022 covered call at the $10 strike and collect the premium based on the 65 cents bid, which annualizes to an additional 5.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 25.4% annualized rate in the scenario where the stock is not called away. Any upside above $10 would be lost if the stock rises there and is called away, but AM shares would have to advance 65.6% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 76.3% return from this trading level, in addition to any dividends collected before the stock was called.