DKNG Dividend Type Payments
Although DKNG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on DraftKings 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 Thu 4:16 PM ET):
| DraftKings Inc. - Class A (DKNG) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 29.17 |
29.35 |
29.00 |
-0.02 |
10.7M |
- |
26B |
DKNG Dividend-Like Income Using Covered Calls
With DKNG at 29.00, 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% |
0.87 |
0.2 |
| 5% |
1.45 |
0.4 |
| 10% |
2.90 |
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 DKNG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
29.50 |
1.03 |
16 |
6.4 |
0.15 (0.5%) |
| Dec 12 |
30.00 |
1.11 |
23 |
4.8 |
0.65 (2.2%) |
| 5% Yield On DKNG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
29.50 |
1.03 |
16 |
6.4 |
0.15 (0.5%) |
| Dec 12 |
30.00 |
1.11 |
23 |
4.8 |
0.65 (2.2%) |
| 10% Yield On DKNG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
29.50 |
1.03 |
16 |
6.4 |
0.15 (0.5%) |
| Dec 12 |
30.00 |
1.11 |
23 |
4.8 |
0.65 (2.2%) |
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