Shareholders of Golar LNG Ltd (GLNG) looking to boost their income beyond the stock's 4% annualized dividend yield can sell the January 2025 covered call at the $30 strike and collect the premium based on the $1.50 bid, which annualizes to an additional 7.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.7% annualized rate in the scenario where the stock is not called away. Any upside above $30 would be lost if the stock rises there and is called away, but GLNG shares would have to advance 19.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 25.3% return from this trading level, in addition to any dividends collected before the stock was called.

Read full article here »