BIB Dividend Type Payments

Although BIB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES ULTRA NASDAQ BIOTECH to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 1:15 PM ET):

PROSHARES ULTRA NASDAQ BIOTECH (BIB)
Bid Ask Last Change Volume P/E Market Cap
63.69 63.79 63.88 +1.39 55K - 3.4B

BIB Dividend-Like Income Using Covered Calls

With BIB at 63.88, 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% 1.92 0.5
5% 3.19 0.9
10% 6.39 1.8

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 BIB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 71.00 0.25 37 0.7 7.21 (11.3%)
Oct 19 73.00 0.55 65 0.8 9.21 (14.4%)
5% Yield On BIB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 70.00 0.40 37 1.1 6.21 (9.7%)
Oct 19 72.00 0.70 65 1.1 8.21 (12.9%)
10% Yield On BIB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 68.00 0.85 37 2.3 4.21 (6.6%)
Oct 19 70.00 1.15 65 1.8 6.21 (9.7%)

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Want more examples? BHVN Dividend | BIBL Dividend