YieldBoost NSP From 1.3% To 19.2% Using Options

Shareholders of Insperity Inc (NSP) looking to boost their income beyond the stock's 1.3% annualized dividend yield can sell the July covered call at the $95 strike and collect the premium based on the $8.30 bid, which annualizes to an additional 17.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19.2% annualized rate in the scenario where the stock is not called away. Any upside above $95 would be lost if the stock rises there and is called away, but NSP shares would have to advance 3.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 12.2% return from this trading level, in addition to any dividends collected before the stock was called.