How To YieldBoost Tronox Holdings To 24.6% Using Options

Shareholders of Tronox Holdings PLC (TROX) looking to boost their income beyond the stock's 3.6% annualized dividend yield can sell the February 2025 covered call at the $15 strike and collect the premium based on the $1.20 bid, which annualizes to an additional 21.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 24.6% 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 TROX shares would have to climb 6.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 15.4% return from this trading level, in addition to any dividends collected before the stock was called.