FAB Dividend Type Payments
Although FAB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on First Trust Multi Cap Value AlphaDEX Fund to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 1:05 PM ET):
| First Trust Multi Cap Value AlphaDEX Fund (FAB) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 76.73 | 76.92 | 76.86 | -0.14 | 0K | - | 0.1B |
FAB Dividend-Like Income Using Covered Calls
With FAB at 76.86, 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% | 2.31 | 0.6 |
| 5% | 3.84 | 1.1 |
| 10% | 7.69 | 2.1 |
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 FAB Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Oct 17 | 77.00 | 3.30 | 166 | 2.0 | 0.08 (0.1%) | |
| Jul 18 | 77.00 | 1.70 | 75 | 2.3 | 0.08 (0.1%) | |
| 5% Yield On FAB Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Oct 17 | 77.00 | 3.30 | 166 | 2.0 | 0.08 (0.1%) | |
| Jul 18 | 77.00 | 1.70 | 75 | 2.3 | 0.08 (0.1%) | |
| 10% Yield On FAB Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jul 18 | 77.00 | 1.70 | 75 | 2.3 | 0.08 (0.1%) | |
| Jun 20 | 77.00 | 1.15 | 47 | 2.4 | 0.08 (0.1%) | |
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| Top 10 Open Interest For May 16 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | IWM dividend | 1. | APP dividend | |
| 2. | SPY dividend | 7. | FXI dividend | 2. | IONQ dividend | |
| 3. | TLT dividend | 8. | TSLA dividend | 3. | EOSE dividend | |
| 4. | SLV dividend | 9. | GLD dividend | 4. | DDOG dividend | |
| 5. | QQQ dividend | 10. | SNAP dividend | 5. | PINS dividend | |
Want more examples? F Dividend | FAD Dividend
