How To YieldBoost DK From 4.5% To 15.9% Using Options

Shareholders of Delek US Holdings Inc (DK) looking to boost their income beyond the stock's 4.5% annualized dividend yield can sell the January 2025 covered call at the $25 strike and collect the premium based on the $1.25 bid, which annualizes to an additional 11.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 15.9% annualized rate in the scenario where the stock is not called away. Any upside above $25 would be lost if the stock rises there and is called away, but DK shares would have to climb 14.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 19.8% return from this trading level, in addition to any dividends collected before the stock was called.