Shareholders of Flagstar Financial Inc (FLG) looking to boost their income beyond the stock's 0.4% annualized dividend yield can sell the January 2026 covered call at the $12 strike and collect the premium based on the 75 cents bid, which annualizes to an additional 15.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 15.7% annualized rate in the scenario where the stock is not called away. Any upside above $12 would be lost if the stock rises there and is called away, but FLG shares would have to advance 10% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 16.9% return from this trading level, in addition to any dividends collected before the stock was called.

Read full article here »