YieldBoost Clear Secure From 1.9% To 8.5% Using Options
December 16, 2024 at 11:38 AM EST
Shareholders of Clear Secure Inc (YOU) looking to boost their income beyond the stock's 1.9% annualized dividend yield can sell the January 2027 covered call at the $45 strike and collect the premium based on the $3.60 bid, which annualizes to an additional 6.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8.5% annualized rate in the scenario where the stock is not called away. Any upside above $45 would be lost if the stock rises there and is called away, but YOU shares would have to climb 72.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 85.9% return from this trading level, in addition to any dividends collected before the stock was called.