CME Dividend Type Payments

CME Group Inc. - Class A dividend

Although CME has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on CME Group Inc. - Class A 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):

CME Group Inc. - Class A (CME)
Bid Ask Last Change Volume P/E Market Cap
268.67 272.02 269.50 -1.46 1.5M 27 98B

CME Dividend-Like Income Using Covered Calls

With CME at 269.50, 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% 8.09 2.2
5% 13.48 3.7
10% 26.95 7.4

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 CME Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 280.00 6.10 64 9.5 7.98 (3.0%)
Jul 18 280.00 2.50 36 6.9 7.98 (3.0%)
5% Yield On CME Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 280.00 6.10 64 9.5 7.98 (3.0%)
Jul 18 280.00 2.50 36 6.9 7.98 (3.0%)
10% Yield On CME Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 280.00 6.10 64 9.5 7.98 (3.0%)
Sep 19 280.00 7.80 99 7.9 7.98 (3.0%)

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