IEF Dividend Type Payments

iShares BARCLAYS 7-10-YEAR TRE dividend

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):

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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