GCAP Dividend

GAIN CAPITAL HOLDINGS dividend

Although GCAP has a dividend of 0.06 with an ex-dividend date of Sep 10, you can sell covered calls on GAIN CAPITAL HOLDINGS 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):

GAIN CAPITAL HOLDINGS (GCAP)
Bid Ask Last Change Volume P/E Market Cap
6.99 7.48 7.01 -0.18 222K 13 0.3B

GCAP Dividend-Like Income Using Covered Calls

With GCAP at 7.01, 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% 0.21 0.1
5% 0.35 0.1
10% 0.70 0.2

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 GCAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 8.00 0.05 68 0.1 0.52 (7.4%)
Jan 18 9.00 0.10 159 0.1 1.52 (21.7%)
5% Yield On GCAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 8.00 0.25 159 0.2 0.52 (7.4%)
Jan 17 7.50 0.75 523 0.1 0.02 (0.3%)

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