YieldBoost Booking Holdings To 22.6% Using Options

Shareholders of Booking Holdings Inc (BKNG) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the August covered call at the $3925 strike and collect the premium based on the $114.70 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 22.6% annualized rate in the scenario where the stock is not called away. Any upside above $3925 would be lost if the stock rises there and is called away, but BKNG shares would have to advance 1.7% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 4.7% return from this trading level, in addition to any dividends collected before the stock was called.