FBT Dividend Type Payments

Although FBT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on First Trust Amex Biotech Index Fund 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):

First Trust Amex Biotech Index Fund (FBT)
Bid Ask Last Change Volume P/E Market Cap
145.10 148.73 145.66 -5.32 502K - 0.0B

FBT Dividend-Like Income Using Covered Calls

With FBT at 145.66, 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% 4.37 1.2
5% 7.28 2.0
10% 14.57 4.0

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 FBT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 154.00 0.60 28 2.1 5.27 (3.6%)
May 17 157.00 0.90 57 1.6 8.27 (5.7%)
5% Yield On FBT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 154.00 0.60 28 2.1 5.27 (3.6%)
May 17 155.00 1.40 57 2.5 6.27 (4.3%)
10% Yield On FBT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 151.00 1.30 28 4.6 2.27 (1.6%)
May 17 151.00 2.40 57 4.2 2.27 (1.6%)

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Want more examples? FBR Dividend | FC Dividend