YieldBoost NOV From 2% To 11.8% Using Options

Shareholders of NOV Inc (NOV) looking to boost their income beyond the stock's 2% annualized dividend yield can sell the August covered call at the $17 strike and collect the premium based on the 90 cents bid, which annualizes to an additional 9.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.8% annualized rate in the scenario where the stock is not called away. Any upside above $17 would be lost if the stock rises there and is called away, but NOV shares would have to climb 13.6% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 19.7% return from this trading level, in addition to any dividends collected before the stock was called.