How To YieldBoost CIT From 0.8% To 3.6% Using Options

Shareholders of CIT Group, Inc. (NYSE: CIT) looking to boost their income beyond the stock's 0.8% annualized dividend yield can sell the January 2016 covered call at the $57.50 strike and collect the premium based on the $2.92 bid, which annualizes to an additional 2.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 3.6% annualized rate in the scenario where the stock is not called away. Any upside above $57.50 would be lost ...