YieldBoost Live Oak Bancshares From 0.3% To 15% Using Options

Shareholders of Live Oak Bancshares Inc (LOB) looking to boost their income beyond the stock's 0.3% annualized dividend yield can sell the June 2025 covered call at the $50 strike and collect the premium based on the $3.90 bid, which annualizes to an additional 14.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 15% annualized rate in the scenario where the stock is not called away. Any upside above $50 would be lost if the stock rises there and is called away, but LOB shares would have to climb 9.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 18% return from this trading level, in addition to any dividends collected before the stock was called.