BAC Dividend Type Payments

BANK of AMERICA CORP dividend

Although BAC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on BANK of AMERICA CORP to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 1:30 PM ET):

BANK of AMERICA CORP (BAC)
Bid Ask Last Change Volume P/E Market Cap
30.10 30.11 30.11 +0.10 39.9M 17 301B

BAC Dividend-Like Income Using Covered Calls

With BAC at 30.11, 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% 0.90 0.2
5% 1.51 0.4
10% 3.01 0.8

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 BAC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 31.00 0.01 3 0.3 0.89 (3.0%)
Jul 27 31.50 0.03 10 0.3 1.39 (4.6%)
5% Yield On BAC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 30.50 0.05 3 1.7 0.39 (1.3%)
Jul 27 31.00 0.07 10 0.7 0.89 (3.0%)
10% Yield On BAC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 30.50 0.05 3 1.7 0.39 (1.3%)
Jul 27 30.50 0.18 10 1.8 0.39 (1.3%)

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Top 10 Open Interest For Jul 20 Expiration     Top 5 High Yield
1.SPY dividend 6.EWZ dividend   1.SKX dividend
2.EEM dividend 7.MU dividend   2.LLNW dividend
3.XLF dividend 8.QQQ dividend   3.EBAY dividend
4.BAC dividend 9.T dividend   4.CLF dividend
5.SPX dividend 10.VXX dividend   5.CCK dividend

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