FXA Dividend Type Payments

CURRENCYSHARES AUSTRALIAN DOLL dividend

Although FXA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on CURRENCYSHARES AUSTRALIAN DOLL to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 9:55 AM ET):

CURRENCYSHARES AUSTRALIAN DOLL (FXA)
Bid Ask Last Change Volume P/E Market Cap
72.83 72.85 72.75 +0.39 4K - 1.7B

FXA Dividend-Like Income Using Covered Calls

With FXA at 72.75, 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% 2.18 0.6
5% 3.64 1.0
10% 7.28 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 FXA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 74.00 0.25 37 0.7 1.15 (1.6%)
Dec 21 74.00 0.90 128 0.7 1.15 (1.6%)
5% Yield On FXA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 73.00 0.65 37 1.8 0.15 (0.2%)
Dec 21 73.00 1.40 128 1.1 0.15 (0.2%)

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Want more examples? FWRD Dividend | FXB Dividend