How To YieldBoost GTN From 7.5% To 29.2% Using Options

Shareholders of Gray Television Inc (GTN) looking to boost their income beyond the stock's 7.5% annualized dividend yield can sell the January 2025 covered call at the $5 strike and collect the premium based on the 40 cents bid, which annualizes to an additional 21.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 29.2% annualized rate in the scenario where the stock is not called away. Any upside above $5 would be lost if the stock rises there and is called away, but GTN shares would have to advance 17.6% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 27.1% return from this trading level, in addition to any dividends collected before the stock was called.