YieldBoost AF To 21.6% Using Options

Shareholders of Astoria Financial Corp. (NYSE: AF) looking to boost their income beyond the stock’s 1.1% annualized dividend yield can sell the January 2014 covered call at the $15 strike and collect the premium based on the 15 cents bid, which annualizes to an additional 20.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 21.6% 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 AF shares would have to climb 6.7% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 7.8% return from this trading level, in addition to any dividends collected before the stock was called.

http://www.forbes.com/sites/stockoptionschannel/2013/12/30/yieldboost-af-to-21-6-using-options/