AMBC Dividend Type Payments

Although AMBC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on AMBAC FINANCIAL GROUP to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

AMBAC FINANCIAL GROUP (AMBC)
Bid Ask Last Change Volume P/E Market Cap
21.72 22.13 22.13 +0.30 497K 10 1.0B

AMBC Dividend-Like Income Using Covered Calls

With AMBC at 22.13, here's a table showing how big the annual "dividend" (ie. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield Annual Premium Cents/Day
3% 0.66 0.2
5% 1.11 0.3
10% 2.21 0.6

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On AMBC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 22.50 0.55 37 1.5 0.37 (1.7%)
Nov 16 25.00 0.55 93 0.6 2.87 (13.0%)
5% Yield On AMBC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 22.50 0.55 37 1.5 0.37 (1.7%)
Nov 16 25.00 0.55 93 0.6 2.87 (13.0%)
10% Yield On AMBC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 22.50 0.55 37 1.5 0.37 (1.7%)
Nov 16 22.50 1.25 93 1.3 0.37 (1.7%)

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Top 10 Open Interest For Aug 17 Expiration     Top 5 High Yield
1.SPY dividend 6.XLF dividend   1.AMAT dividend
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5.SPX dividend 10.AABA dividend   5.AKRX dividend

Want more examples? AMBA Dividend | AMBR Dividend