YieldBoost SandRidge Energy To 20.1% Using Options

Shareholders of SandRidge Energy Inc (SD) looking to boost their income beyond the stock's 3.7% annualized dividend yield can sell the April 2025 covered call at the $12.50 strike and collect the premium based on the 75 cents bid, which annualizes to an additional 16.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 20.1% 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 SD shares would have to climb 5.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 12.3% return from this trading level, in addition to any dividends collected before the stock was called.