DUG Dividend Type Payments

Proshares Ultra-Short Oil & Gas dividend

Although DUG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Proshares Ultra-Short Oil & Gas 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):

Proshares Ultra-Short Oil & Gas (DUG)
Bid Ask Last Change Volume P/E Market Cap
35.94 37.71 37.12 0.00 31K - 0.0B

DUG Dividend-Like Income Using Covered Calls

With DUG at 37.12, 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% 1.11 0.3
5% 1.86 0.5
10% 3.71 1.0

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 DUG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 45.00 0.10 25 0.4 7.29 (19.6%)
May 17 51.00 0.20 54 0.4 13.29 (35.8%)
5% Yield On DUG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 44.00 0.15 25 0.6 6.29 (16.9%)
May 17 48.00 0.30 54 0.6 10.29 (27.7%)
10% Yield On DUG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 42.00 0.30 25 1.2 4.29 (11.6%)
May 17 44.00 0.60 54 1.1 6.29 (16.9%)

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