FWONA Dividend Type Payments

Although FWONA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on LIBERTY MEDIA CORP SERIES A FORMULA ONE to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

LIBERTY MEDIA CORP SERIES A FORMULA ONE (FWONA)
Bid Ask Last Change Volume P/E Market Cap
28.19 32.37 32.08 -0.01 73K 19 7.8B

FWONA Dividend-Like Income Using Covered Calls

With FWONA at 32.08, 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% 0.96 0.3
5% 1.60 0.4
10% 3.21 0.9

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 FWONA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 35.00 0.70 89 0.8 2.63 (8.2%)
5% Yield On FWONA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 35.00 0.70 89 0.8 2.63 (8.2%)

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