YieldBoost CRA International To 9.8% Using Options

Shareholders of CRA International Inc (CRAI) looking to boost their income beyond the stock's 1.1% annualized dividend yield can sell the August covered call at the $200 strike and collect the premium based on the $8.60 bid, which annualizes to an additional 8.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.8% annualized rate in the scenario where the stock is not called away. Any upside above $200 would be lost if the stock rises there and is called away, but CRAI shares would have to climb 7.5% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 12.1% return from this trading level, in addition to any dividends collected before the stock was called.