FXL Dividend Type Payments

Although FXL has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on FIRST TRUST TECH ALPHADE 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 TECH ALPHADE (FXL)
Bid Ask Last Change Volume P/E Market Cap
55.61 56.43 56.07 -1.31 154K - 20B

FXL Dividend-Like Income Using Covered Calls

With FXL at 56.07, 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% 1.68 0.5
5% 2.80 0.8
10% 5.61 1.5

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 FXL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 57.00 0.20 29 0.7 0.57 (1.0%)
Dec 21 59.00 0.40 64 0.6 2.57 (4.6%)
5% Yield On FXL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 58.00 0.80 64 1.3 1.57 (2.8%)
Mar 15 57.00 1.20 148 0.8 0.57 (1.0%)

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Want more examples? FXJP Dividend | FXN Dividend