YieldBoost Travelers Companies From 1.7% To 4.2% Using Options

Shareholders of Travelers Companies Inc (TRV) looking to boost their income beyond the stock's 1.7% annualized dividend yield can sell the January 2027 covered call at the $320 strike and collect the premium based on the $12.10 bid, which annualizes to an additional 2.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 4.2% annualized rate in the scenario where the stock is not called away. Any upside above $320 would be lost if the stock rises there and is called away, but TRV shares would have to advance 32.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 37.2% return from this trading level, in addition to any dividends collected before the stock was called.