CF Dividend

Although CF has a dividend of 0.50 with an ex-dividend date of Nov 14, you can sell covered calls on CF Industries Holdings, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 1:40 PM ET):

CF Industries Holdings, Inc. (CF)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
88.13	88.17	88.14	+0.80	489K	11	14B

CF Dividend-Like Income Using Covered Calls

With CF at 88.14, 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%	2.64	0.7
5%	4.41	1.2
10%	8.81	2.4

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 CF Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Nov 7	100.00	0.40	26	1.5	11.83 (13.4%)
Nov 14	100.00	0.30	33	0.9	11.83 (13.4%)

5% Yield On CF Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Nov 7	100.00	0.40	26	1.5	11.83 (13.4%)
Nov 14	102.00	0.50	33	1.5	13.83 (15.7%)

10% Yield On CF Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Nov 7	88.00	3.90	26	14.3	0.00 (0.0%)
Nov 14	88.00	4.20	33	12.2	0.00 (0.0%)

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Want more examples? CEW Dividend | CFA Dividend