YieldBoost ARIS To 25.2% Using Options

Shareholders of Aris Water Solutions Inc (ARIS) looking to boost their income beyond the stock's 2.6% annualized dividend yield can sell the October covered call at the $15 strike and collect the premium based on the $1.45 bid, which annualizes to an additional 22.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 25.2% 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 ARIS shares would have to advance 8.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 19.5% return from this trading level, in addition to any dividends collected before the stock was called.