HYG Dividend Type Payments
Although HYG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares iBoxx $ High Yield Corporate Bond ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
iShares iBoxx $ High Yield Corporate Bond ETF (HYG) | ||||||
---|---|---|---|---|---|---|
Bid | Ask | Last | Change | Volume | P/E | Market Cap |
79.53 | 79.58 | 79.60 | -0.12 | 24.0M | - | 15B |
HYG Dividend-Like Income Using Covered Calls
With HYG at 79.60, here's a table showing how big the annual "dividend" (i.e. 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% | 3.98 | 1.1 |
10% | 7.96 | 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:
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Top 10 Open Interest For Feb 21 Expiration | Top 5 High Yield | |||||
---|---|---|---|---|---|---|
1. | NVDA dividend | 6. | TSLA dividend | 1. | BILL dividend | |
2. | TLT dividend | 7. | QQQ dividend | 2. | NET dividend | |
3. | SPY dividend | 8. | SLV dividend | 3. | AMZN dividend | |
4. | IWM dividend | 9. | KWEB dividend | 4. | ELF dividend | |
5. | FXI dividend | 10. | GLD dividend | 5. | AFRM dividend |
Want more examples? HYEM Dividend | HYGH Dividend