Shareholders of Advanced Drainage Systems Inc (WMS) looking to boost their income beyond the stock's 0.6% annualized dividend yield can sell the December covered call at the $125 strike and collect the premium based on the $9.60 bid, which annualizes to an additional 17.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 18.1% annualized rate in the scenario where the stock is not called away. Any upside above $125 would be lost if the stock rises there and is called away, but WMS shares would have to advance 5.6% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 13.7% return from this trading level, in addition to any dividends collected before the stock was called.

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