How To YieldBoost CNMD To 15.5% Using Options

Shareholders of CONMED Corp (CNMD) looking to boost their income beyond the stock's 1.1% annualized dividend yield can sell the February 2025 covered call at the $75 strike and collect the premium based on the $5.00 bid, which annualizes to an additional 14.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 15.5% annualized rate in the scenario where the stock is not called away. Any upside above $75 would be lost if the stock rises there and is called away, but CNMD shares would have to climb 7.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 14.7% return from this trading level, in addition to any dividends collected before the stock was called.