ED Dividend

Although ED has a dividend of 0.83 with an ex-dividend date of May 14, you can sell covered calls on Consolidated Edison, Inc. 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):

Consolidated Edison, Inc. (ED)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
91.67	93.28	92.84	+0.11	1.8M	13	32B

ED Dividend-Like Income Using Covered Calls

With ED at 92.84, 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%	2.79	0.8
5%	4.64	1.3
10%	9.28	2.5

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 ED Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 17	95.00	0.60	25	2.4	1.72 (1.9%)
Jun 21	95.00	1.40	60	2.3	1.72 (1.9%)

5% Yield On ED Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 17	95.00	0.60	25	2.4	1.72 (1.9%)
Jun 21	95.00	1.40	60	2.3	1.72 (1.9%)

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