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YieldBoost XP To 21.5% Using Options

Shareholders of XP Inc - Class A (XP) looking to boost their income beyond the stock's 5% annualized dividend yield can sell the May 2025 covered call at the $15 strike and collect the premium based on the 88 cents bid, which annualizes to an additional 16.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 21.5% annualized rate in the scenario where the stock is not called away. Any upside above $15 would be lost if the stock rises there and is called away, but XP shares would have to advance 15.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 22.2% return from this trading level, in addition to any dividends collected before the stock was called.
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