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 Fri 4:16 PM ET):

Proshares Ultra-Short Oil & Gas (DUG)
Bid Ask Last Change Volume P/E Market Cap
43.43 44.76 44.19 +2.12 113K - 0.0B

DUG Dividend-Like Income Using Covered Calls

With DUG at 44.19, 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% 1.33 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 DUG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 50.00 0.15 8 1.9 5.24 (11.9%)
Jan 18 50.00 0.85 36 2.4 5.24 (11.9%)
5% Yield On DUG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 50.00 0.15 8 1.9 5.24 (11.9%)
Jan 18 50.00 0.85 36 2.4 5.24 (11.9%)
10% Yield On DUG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 50.00 0.15 8 1.9 5.24 (11.9%)
Jan 18 50.00 0.85 36 2.4 5.24 (11.9%)

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