How To YieldBoost CC From 5.4% To 12.5% Using Options
February 04, 2025 at 11:41 AM EST
Shareholders of Chemours Co (CC) looking to boost their income beyond the stock's 5.4% annualized dividend yield can sell the January 2026 covered call at the $25 strike and collect the premium based on the $1.25 bid, which annualizes to an additional 7.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 12.5% 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 CC shares would have to climb 35% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 41.7% return from this trading level, in addition to any dividends collected before the stock was called.