YieldBoost Hudson Pacific Properties From 3.6% To 19.4% Using Options

Shareholders of Hudson Pacific Properties Inc (HPP) looking to boost their income beyond the stock's 3.6% annualized dividend yield can sell the September covered call at the $7.50 strike and collect the premium based on the 30 cents bid, which annualizes to an additional 15.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19.4% annualized rate in the scenario where the stock is not called away. Any upside above $7.50 would be lost if the stock rises there and is called away, but HPP shares would have to climb 36.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 41.6% return from this trading level, in addition to any dividends collected before the stock was called.