YieldBoost Playtika Holding From 4.7% To 9.5% Using Options
December 03, 2024 at 11:37 AM EST
Shareholders of Playtika Holding Corp (PLTK) looking to boost their income beyond the stock's 4.7% annualized dividend yield can sell the January 2026 covered call at the $12.50 strike and collect the premium based on the 45 cents bid, which annualizes to an additional 4.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.5% annualized rate in the scenario where the stock is not called away. Any upside above $12.50 would be lost if the stock rises there and is called away, but PLTK shares would have to advance 47.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 53.3% return from this trading level, in addition to any dividends collected before the stock was called.