FAS Dividend Type Payments

DIREXION DAILY FINANCIAL BULL dividend

Although FAS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on DIREXION DAILY FINANCIAL BULL 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):

DIREXION DAILY FINANCIAL BULL (FAS)
Bid Ask Last Change Volume P/E Market Cap
73.19 74.46 73.62 +0.35 754K - 19B

FAS Dividend-Like Income Using Covered Calls

With FAS at 73.62, 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% 2.21 0.6
5% 3.68 1.0
10% 7.36 2.0

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 FAS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 75.00 0.18 4 4.5 0.54 (0.7%)
Aug 31 78.00 0.10 11 0.9 3.54 (4.8%)
5% Yield On FAS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 75.00 0.18 4 4.5 0.54 (0.7%)
Aug 31 77.00 0.21 11 1.9 2.54 (3.5%)
10% Yield On FAS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 75.00 0.18 4 4.5 0.54 (0.7%)
Aug 31 76.50 0.28 11 2.5 2.04 (2.8%)

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