YieldBoost BUR From 1% To 10.1% Using Options

Shareholders of Burford Capital Limited Ordinary Shares (BUR) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the August covered call at the $15 strike and collect the premium based on the 70 cents bid, which annualizes to an additional 9.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 10.1% annualized rate in the scenario where the stock is not called away. Any upside above $15 would be lost if the stock rises there and is called away, but BUR shares would have to advance 16.7% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 22.2% return from this trading level, in addition to any dividends collected before the stock was called.