YieldBoost Delek US Holdings From 5.7% To 19.4% Using Options

Shareholders of Delek US Holdings Inc (DK) looking to boost their income beyond the stock's 5.7% annualized dividend yield can sell the April 2025 covered call at the $22.50 strike and collect the premium based on the $1.05 bid, which annualizes to an additional 13.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19.4% annualized rate in the scenario where the stock is not called away. Any upside above $22.50 would be lost if the stock rises there and is called away, but DK shares would have to advance 25.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 31.3% return from this trading level, in addition to any dividends collected before the stock was called.