CWEB Dividend Type Payments

Although CWEB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Direxion Daily CSI China Internet Index Bull 2X Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 12:05 PM ET):

Direxion Daily CSI China Internet Index Bull 2X Shares (CWEB)
Bid Ask Last Change Volume P/E Market Cap
27.32 27.45 27.45 +1.68 114K - 0.0B

CWEB Dividend-Like Income Using Covered Calls

With CWEB at 27.45, 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% 0.82 0.2
5% 1.37 0.4
10% 2.75 0.8

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 CWEB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 30.00 0.05 22 0.2 2.55 (9.3%)
Apr 18 32.00 0.25 56 0.4 4.55 (16.6%)
5% Yield On CWEB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 29.00 0.15 22 0.7 1.55 (5.6%)
Apr 18 32.00 0.25 56 0.4 4.55 (16.6%)
10% Yield On CWEB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 28.00 0.60 22 2.7 0.55 (2.0%)
Apr 18 29.00 0.90 56 1.6 1.55 (5.6%)

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