Strategy To YieldBoost CGNX From 0.5% To 24.4% Using Options

Cognex (CGNX) shareholders seeking more income can sell a November covered call at the $80 strike for a $5.70 premium, adding an estimated annualized ~23.9% return on top of the stock’s ~0.5% dividend yield. The strategy implies investors are willing to cap upside in exchange for option premium income.

Analysis

Cognex (CGNX) shareholders seeking more income can sell a November covered call at the $80 strike for a $5.70 premium, adding an estimated annualized ~23.9% return on top of the stock’s ~0.5% dividend yield. The strategy implies investors are willing to cap upside in exchange for option premium income.