YieldBoost Office Properties Income Trust To 24.6% Using Options

Shareholders of Office Properties Income Trust (OPI) looking to boost their income beyond the stock's 1.7% annualized dividend yield can sell the September covered call at the $3 strike and collect the premium based on the 30 cents bid, which annualizes to an additional 22.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 24.6% annualized rate in the scenario where the stock is not called away. Any upside above $3 would be lost if the stock rises there and is called away, but OPI shares would have to climb 24.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 36.9% return from this trading level, in addition to any dividends collected before the stock was called.