YieldBoost Public Storage To 22.9% Using Options

Shareholders of Public Storage (PSA) looking to boost their income beyond the stock's 4.3% annualized dividend yield can sell the September covered call at the $280 strike and collect the premium based on the $13.50 bid, which annualizes to an additional 18.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 22.9% annualized rate in the scenario where the stock is not called away. Any upside above $280 would be lost if the stock rises there and is called away, but PSA shares would have to climb 0.2% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 5% return from this trading level, in addition to any dividends collected before the stock was called.