CHAU Dividend Type Payments

Although CHAU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on DIREXION DAILY CSI 300 CHINA A BULL X2 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):

DIREXION DAILY CSI 300 CHINA A BULL X2 (CHAU)
Bid Ask Last Change Volume P/E Market Cap
17.71 17.99 17.91 +0.24 303K - 0.6B

CHAU Dividend-Like Income Using Covered Calls

With CHAU at 17.91, 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% 0.54 0.1
5% 0.90 0.2
10% 1.79 0.5

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 CHAU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 22.00 0.15 36 0.4 4.01 (22.4%)
Oct 19 24.00 0.15 64 0.2 6.01 (33.6%)
5% Yield On CHAU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 22.00 0.15 36 0.4 4.01 (22.4%)
Oct 19 23.00 0.25 64 0.4 5.01 (28.0%)
10% Yield On CHAU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 21.00 0.25 36 0.7 3.01 (16.8%)
Oct 19 22.00 0.40 64 0.6 4.01 (22.4%)

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