CYOU Dividend Type Payments

Changyou.com Ltd ADS dividend

Although CYOU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Changyou.com Ltd ADS 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):

Changyou.com Ltd ADS (CYOU)
Bid Ask Last Change Volume P/E Market Cap
16.50 18.50 16.89 -0.95 94K - 0.3B

CYOU Dividend-Like Income Using Covered Calls

With CYOU at 16.89, 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% 0.51 0.1
5% 0.84 0.2
10% 1.69 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 CYOU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 19.00 0.10 28 0.4 0.50 (3.0%)
May 17 21.00 0.10 57 0.2 2.50 (14.8%)
5% Yield On CYOU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 19.00 0.10 28 0.4 0.50 (3.0%)
May 17 20.00 0.25 57 0.4 1.50 (8.9%)
10% Yield On CYOU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 19.00 0.40 57 0.7 0.50 (3.0%)
Jul 19 19.00 0.75 120 0.6 0.50 (3.0%)

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