Strategy To YieldBoost BRY To 23.1% Using Options

Shareholders of Berry Corp (bry) (BRY) looking to boost their income beyond the stock's 2.8% annualized dividend yield can sell the March covered call at the $5 strike and collect the premium based on the 10 cents bid, which annualizes to an additional 20.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 23.1% annualized rate in the scenario where the stock is not called away. Any upside above $5 would be lost if the stock rises there and is called away, but BRY shares would have to climb 16.8% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 19.2% return from this trading level, in addition to any dividends collected before the stock was called.