How To YieldBoost W & T Offshore From 1.5% To 19.7% Using Options

Shareholders of W & T Offshore Inc (WTI) looking to boost their income beyond the stock's 1.5% annualized dividend yield can sell the January 2025 covered call at the $3 strike and collect the premium based on the 40 cents bid, which annualizes to an additional 18.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19.7% annualized rate in the scenario where the stock is not called away. Any upside above $3 would be lost if the stock rises there and is called away, but WTI shares would have to climb 12.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 27.8% return from this trading level, in addition to any dividends collected before the stock was called.