IEF Dividend Type Payments
Although IEF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares BARCLAYS 7-10-YEAR TRE 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 BARCLAYS 7-10-YEAR TRE (IEF) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 102.67 | 102.69 | 102.68 | -0.14 | 2.5M | - | 86B |
IEF Dividend-Like Income Using Covered Calls
With IEF at 102.68, 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% | 3.08 | 0.8 |
| 5% | 5.13 | 1.4 |
| 10% | 10.27 | 2.8 |
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 | |
| Sep 21 | 103.00 | 0.30 | 32 | 0.9 | 0.31 (0.3%) | |
| Oct 19 | 103.00 | 0.55 | 60 | 0.9 | 0.31 (0.3%) | |
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| Top 10 Open Interest For Sep 21 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPY dividend | 6. | GE dividend | 1. | MOMO dividend | |
| 2. | EEM dividend | 7. | GLD dividend | 2. | AKRX dividend | |
| 3. | SPX dividend | 8. | FB dividend | 3. | UVXY dividend | |
| 4. | QQQ dividend | 9. | IWM dividend | 4. | BABA dividend | |
| 5. | XLF dividend | 10. | GDX dividend | 5. | GERN dividend | |
Want more examples? IEBTR Dividend | IEFA Dividend
