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YieldBoost Advanced Energy Industries From 0.5% To 16.1% Using Options

Shareholders of Advanced Energy Industries Inc (AEIS) looking to boost their income beyond the stock's 0.5% annualized dividend yield can sell the June 2022 covered call at the $85 strike and collect the premium based on the $10.60 bid, which annualizes to an additional 15.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 16.1% annualized rate in the scenario where the stock is not called away. Any upside above $85 would be lost if the stock rises there and is called away, but AEIS shares would have to climb 3.2% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 16.1% return from this trading level, in addition to any dividends collected before the stock was called.
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