YieldBoost CDRE To 315.8% Using Options
June 11, 2024 at 12:20 PM EDT
Shareholders of Cadre Holdings Inc (CDRE) looking to boost their income beyond the stock's 1.1% annualized dividend yield can sell the July covered call at the $50 strike and collect the premium based on the $10.70 bid, which annualizes to an additional 314.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 315.8% annualized rate in the scenario where the stock is not called away. Any upside above $50 would be lost if the stock rises there and is called away, but CDRE shares would have to advance 53.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 85.8% return from this trading level, in addition to any dividends collected before the stock was called.