IEF Dividend Type Payments
Although IEF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares 7-10 Year Treasury Bond ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):
| iShares 7-10 Year Treasury Bond ETF (IEF) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 104.64 | 104.67 | 104.62 | +0.18 | 8.5M | - | 12B |
IEF Dividend-Like Income Using Covered Calls
With IEF at 104.62, 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% | 3.14 | 0.9 |
| 5% | 5.23 | 1.4 |
| 10% | 10.46 | 2.9 |
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 IEF Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Mar 1 | 104.50 | 0.30 | 11 | 1.2 | 0.00 (0.0%) | |
| Mar 15 | 105.00 | 0.25 | 25 | 1.0 | 0.33 (0.3%) | |
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| Top 10 Open Interest For Mar 15 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPX dividend | 6. | EWZ dividend | 1. | ROKU dividend | |
| 2. | EEM dividend | 7. | GE dividend | 2. | IQ dividend | |
| 3. | SPY dividend | 8. | BAC dividend | 3. | BHC dividend | |
| 4. | QQQ dividend | 9. | XOP dividend | 4. | DBX dividend | |
| 5. | FXI dividend | 10. | GLD dividend | 5. | VIPS dividend | |
Want more examples? IDXX Dividend | IEFA Dividend
