CD Dividend Type Payments
Although CD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Chaince Digital Holdings Inc. - American Ordinary Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| Chaince Digital Holdings Inc. - American Ordinary Shares (CD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 6.73 |
7.15 |
7.19 |
-0.38 |
197K |
- |
0.3B |
CD Dividend-Like Income Using Covered Calls
With CD at 7.19, here's a table showing how big the annual "dividend" (i.e. 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% |
0.22 |
0.1 |
| 5% |
0.36 |
0.1 |
| 10% |
0.72 |
0.2 |
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 CD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
7.50 |
0.20 |
8 |
2.5 |
0.35 (4.9%) |
| Jan 16 |
7.50 |
0.05 |
36 |
0.1 |
0.35 (4.9%) |
| 5% Yield On CD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
7.50 |
0.20 |
8 |
2.5 |
0.35 (4.9%) |
| Jan 16 |
7.50 |
0.05 |
36 |
0.1 |
0.35 (4.9%) |
| 10% Yield On CD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
7.50 |
0.20 |
8 |
2.5 |
0.35 (4.9%) |
| Mar 20 |
12.50 |
0.60 |
99 |
0.6 |
5.35 (74.4%) |
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