YieldBoost Perella Weinberg Partners To 16.6% Using Options

Shareholders of Perella Weinberg Partners (PWP) looking to boost their income beyond the stock's 1.6% annualized dividend yield can sell the October covered call at the $20 strike and collect the premium based on the 70 cents bid, which annualizes to an additional 15% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 16.6% annualized rate in the scenario where the stock is not called away. Any upside above $20 would be lost if the stock rises there and is called away, but PWP shares would have to climb 10.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 14.4% return from this trading level, in addition to any dividends collected before the stock was called.