YieldBoost Select Water Solutions To 47.8% Using Options

Shareholders of Select Water Solutions Inc (WTTR) looking to boost their income beyond the stock's 2.1% annualized dividend yield can sell the February covered call at the $15 strike and collect the premium based on the 5 cents bid, which annualizes to an additional 45.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 47.8% annualized rate in the scenario where the stock is not called away. Any upside above $15 would be lost if the stock rises there and is called away, but WTTR shares would have to climb 12.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 12.9% return from this trading level, in addition to any dividends collected before the stock was called.