FXD Dividend Type Payments

Although FXD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on FIRST TRUST CONSUMER DISC ALPH 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 CONSUMER DISC ALPH (FXD)
Bid Ask Last Change Volume P/E Market Cap
39.82 41.24 40.50 +0.47 273K - 4.2B

FXD Dividend-Like Income Using Covered Calls

With FXD at 40.50, 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% 1.22 0.3
5% 2.03 0.6
10% 4.05 1.1

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:

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Top 10 Open Interest For Oct 19 Expiration     Top 5 High Yield
1.SPY dividend 6.MU dividend   1.UVXY dividend
2.SPX dividend 7.FXI dividend   2.CRON dividend
3.EEM dividend 8.AMD dividend   3.TLRY dividend
4.QQQ dividend 9.XLF dividend   4.PYX dividend
5.PBR dividend 10.BABA dividend   5.AMRN dividend

Want more examples? FXCH Dividend | FXE Dividend