CBOE Dividend

CBOE GLOBAL MARKETS INC dividend

Although CBOE has a dividend of 0.31 with an ex-dividend date of Aug 30, you can sell covered calls on CBOE GLOBAL MARKETS INC 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):

CBOE GLOBAL MARKETS INC (CBOE)
Bid Ask Last Change Volume P/E Market Cap
96.75 99.80 97.84 -0.94 603K 21 11B

CBOE Dividend-Like Income Using Covered Calls

With CBOE at 97.84, 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% 2.94 0.8
5% 4.89 1.3
10% 9.78 2.7

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 CBOE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 100.00 0.10 4 2.5 0.20 (0.2%)
Aug 31 102.00 0.10 11 0.9 2.20 (2.2%)
5% Yield On CBOE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 100.00 0.10 4 2.5 0.20 (0.2%)
Aug 31 101.00 0.20 11 1.8 1.20 (1.2%)
10% Yield On CBOE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 31 100.00 0.35 11 3.2 0.20 (0.2%)
Sep 7 100.00 0.60 18 3.3 0.20 (0.2%)

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