Financial News

Strategy To YieldBoost TechnipFMC From 0.8% To 1487.7% Using Options

Shareholders of TechnipFMC plc (FTI) looking to boost their income beyond the stock's 0.8% annualized dividend yield can sell the June covered call at the $31 strike and collect the premium based on the $9.10 bid, which annualizes to an additional 1486.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 1487.7% annualized rate in the scenario where the stock is not called away. Any upside above $31 would be lost if the stock rises there and is called away, but FTI shares would have to climb 24.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 61.6% return from this trading level, in addition to any dividends collected before the stock was called.
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