YieldBoost RITM From 8.8% To 1217.8% Using Options

Shareholders of Rithm Capital Corp (RITM) looking to boost their income beyond the stock's 8.8% annualized dividend yield can sell the July covered call at the $17 strike and collect the premium based on the $22.20 bid, which annualizes to an additional 1209% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 1217.8% 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 RITM shares would have to climb 49.6% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 245.1% return from this trading level, in addition to any dividends collected before the stock was called.