BABA Dividend Type Payments

ALIBABA GROUP HOLDING LTD dividend

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

ALIBABA GROUP HOLDING LTD (BABA)
Bid Ask Last Change Volume P/E Market Cap
156.60 156.65 156.65 -2.24 27.0M 48 409B

BABA Dividend-Like Income Using Covered Calls

With BABA at 156.65, 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% 4.70 1.3
5% 7.83 2.1
10% 15.67 4.3

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 BABA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 167.50 0.06 4 1.5 10.85 (6.9%)
Sep 28 170.00 0.24 11 2.2 13.35 (8.5%)
5% Yield On BABA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 165.00 0.11 4 2.8 8.35 (5.3%)
Sep 28 170.00 0.24 11 2.2 13.35 (8.5%)
10% Yield On BABA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 162.50 0.26 4 6.5 5.85 (3.7%)
Sep 28 165.00 0.75 11 6.8 8.35 (5.3%)

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Top 10 Open Interest For Sep 21 Expiration     Top 5 High Yield
1.EEM dividend 6.GE dividend   1.TGTX dividend
2.SPY dividend 7.EWZ dividend   2.GERN dividend
3.SPX dividend 8.FXI dividend   3.TLRY dividend
4.QQQ dividend 9.VXX dividend   4.CRON dividend
5.XLF dividend 10.FB dividend   5.MU dividend

Want more examples? BAB Dividend | BABY Dividend