FXP Dividend Type Payments

PROSHARES ULTRA-SHORT FTSE CHIN dividend

Although FXP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES ULTRA-SHORT FTSE CHIN 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):

PROSHARES ULTRA-SHORT FTSE CHIN (FXP)
Bid Ask Last Change Volume P/E Market Cap
79.12 80.64 79.78 -3.34 122K - 0.3B

FXP Dividend-Like Income Using Covered Calls

With FXP at 79.78, 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% 2.39 0.7
5% 3.99 1.1
10% 7.98 2.2

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 FXP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 105.00 0.30 29 1.0 24.36 (30.5%)
Dec 21 115.00 0.57 64 0.9 34.36 (43.1%)
5% Yield On FXP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 100.00 0.55 29 1.9 19.36 (24.3%)
Dec 21 95.00 1.12 64 1.8 14.36 (18.0%)
10% Yield On FXP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 95.00 0.96 29 3.3 14.36 (18.0%)
Dec 21 90.00 2.92 64 4.6 9.36 (11.7%)

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Want more examples? FXO Dividend | FXR Dividend