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 Tue 4:16 PM ET):

PROSHARES ULTRA-SHORT OIL & GAS (DUG)
Bid Ask Last Change Volume P/E Market Cap
31.06 32.28 31.56 -0.21 14K - 0.2B

DUG Dividend-Like Income Using Covered Calls

With DUG at 31.56, 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% 0.95 0.3
5% 1.58 0.4
10% 3.16 0.9

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
Sep 21 37.00 0.15 39 0.4 4.72 (15.0%)
Oct 19 40.00 0.25 67 0.4 7.72 (24.5%)
5% Yield On DUG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 36.00 0.20 39 0.5 3.72 (11.8%)
Oct 19 37.00 0.40 67 0.6 4.72 (15.0%)
10% Yield On DUG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 33.00 0.45 39 1.2 0.72 (2.3%)
Oct 19 34.00 0.75 67 1.1 1.72 (5.4%)

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