YieldBoost LGTY To 164.2% Using Options
November 14, 2024 at 12:23 PM EST
Shareholders of Logility Supply Chain Solutions Inc (LGTY) looking to boost their income beyond the stock's 3.9% annualized dividend yield can sell the November covered call at the $12.50 strike and collect the premium based on the 5 cents bid, which annualizes to an additional 160.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 164.2% annualized rate in the scenario where the stock is not called away. Any upside above $12.50 would be lost if the stock rises there and is called away, but LGTY shares would have to advance 9.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 10.3% return from this trading level, in addition to any dividends collected before the stock was called.