YieldBoost Universal Display To 15.2% Using Options

Shareholders of Universal Display Corp (OLED) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the January 2025 covered call at the $170 strike and collect the premium based on the $15.60 bid, which annualizes to an additional 14.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 15.2% annualized rate in the scenario where the stock is not called away. Any upside above $170 would be lost if the stock rises there and is called away, but OLED shares would have to advance 10.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 20.4% return from this trading level, in addition to any dividends collected before the stock was called.