DFEN Dividend Type Payments

Although DFEN has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Direxion Daily Aerospace & Defense Bull 3X 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 Aerospace & Defense Bull 3X (DFEN)
Bid Ask Last Change Volume P/E Market Cap
49.01 54.99 50.49 +2.83 135K - 0.0B

DFEN Dividend-Like Income Using Covered Calls

With DFEN at 50.49, 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% 1.51 0.4
5% 2.52 0.7
10% 5.05 1.4

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 DFEN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 57.00 0.55 63 0.9 2.01 (4.0%)
Jul 19 68.00 0.65 155 0.4 13.01 (25.8%)
5% Yield On DFEN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 57.00 0.55 63 0.9 2.01 (4.0%)
Jul 19 64.00 1.15 155 0.7 9.01 (17.8%)
10% Yield On DFEN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 55.00 1.05 63 1.7 0.01 (0.0%)
Jul 19 59.00 2.25 155 1.5 4.01 (7.9%)

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