Strategy To YieldBoost AA From 1% To 7.6% Using Options

Shareholders of Alcoa Corporation (AA) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the January 2026 covered call at the $60 strike and collect the premium based on the $3.35 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 7.6% annualized rate in the scenario where the stock is not called away. Any upside above $60 would be lost if the stock rises there and is called away, but AA shares would have to climb 52.3% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 60.8% return from this trading level, in addition to any dividends collected before the stock was called.