YieldBoost GNL To 45.1% Using Options
April 10, 2024 at 12:55 PM EDT
Shareholders of Global Net Lease Inc (GNL) looking to boost their income beyond the stock's 15.9% annualized dividend yield can sell the April covered call at the $12.50 strike and collect the premium based on the 5 cents bid, which annualizes to an additional 29.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 45.1% annualized rate in the scenario where the stock is not called away. Any upside above $12.50 would be lost if the stock rises there and is called away, but GNL shares would have to climb 80.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 80.8% return from this trading level, in addition to any dividends collected before the stock was called.