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YieldBoost Core Mark Holding From 1.7% To 18.1% Using Options

Shareholders of Core Mark Holding Co Inc (CORE) looking to boost their income beyond the stock's 1.7% annualized dividend yield can sell the November covered call at the $25 strike and collect the premium based on the $1.35 bid, which annualizes to an additional 16.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 18.1% annualized rate in the scenario where the stock is not called away. Any upside above $25 would be lost if the stock rises there and is called away, but CORE shares would have to climb 5.7% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 11.4% return from this trading level, in addition to any dividends collected before the stock was called.
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