How To YieldBoost Allegion To 12.7% Using Options

Shareholders of Allegion plc (NYSE: ALLE) looking to boost their income beyond the stock's 0.6% annualized dividend yield can sell the March 2015 covered call at the $55 strike and collect the premium based on the $2.50 bid, which annualizes to an additional 12.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 12.7% annualized rate in the scenario where the stock is not called away. Any upside above $55 would be lost if the s...