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 Fri 4:16 PM ET):
| iShares BARCLAYS 7-10-YEAR TRE (IEF) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 100.11 | 100.13 | 100.11 | -0.12 | 2.9M | - | 86B |
IEF Dividend-Like Income Using Covered Calls
With IEF at 100.11, 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% | 3.00 | 0.8 |
| 5% | 5.01 | 1.4 |
| 10% | 10.01 | 2.7 |
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 | |
| Nov 16 | 100.00 | 0.50 | 29 | 1.3 | 0.00 (0.0%) | |
| Dec 21 | 100.00 | 0.75 | 64 | 1.0 | 0.00 (0.0%) | |
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| Top 10 Open Interest For Nov 16 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPY dividend | 6. | SPX dividend | 1. | SNAP dividend | |
| 2. | EWZ dividend | 7. | FXI dividend | 2. | TWTR dividend | |
| 3. | EEM dividend | 8. | VXX dividend | 3. | AMRN dividend | |
| 4. | PBR dividend | 9. | IWM dividend | 4. | AMD dividend | |
| 5. | QQQ dividend | 10. | BAC dividend | 5. | UVXY dividend | |
Want more examples? IEBTR Dividend | IEFA Dividend
