DAX Dividend Type Payments
Although DAX has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Global X DAX Germany ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):
| Global X DAX Germany ETF (DAX) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 43.92 |
44.21 |
44.21 |
+0.25 |
26K |
- |
0.1B |
DAX Dividend-Like Income Using Covered Calls
With DAX at 44.21, 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% |
1.33 |
0.4 |
| 5% |
2.21 |
0.6 |
| 10% |
4.42 |
1.2 |
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 DAX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
45.00 |
0.70 |
47 |
1.5 |
0.79 (1.8%) |
| Nov 21 |
45.00 |
0.10 |
19 |
0.5 |
0.79 (1.8%) |
| 5% Yield On DAX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
45.00 |
0.70 |
47 |
1.5 |
0.79 (1.8%) |
| Jan 16 |
44.00 |
1.10 |
75 |
1.2 |
0.00 (0.0%) |
| 10% Yield On DAX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
45.00 |
0.70 |
47 |
1.5 |
0.79 (1.8%) |
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