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 9:45 AM ET):
| iShares 7-10 Year Treasury Bond ETF (IEF) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 95.42 | 95.43 | 95.42 | -0.34 | 494K | - | 14B |
IEF Dividend-Like Income Using Covered Calls
With IEF at 95.42, 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% | 2.86 | 0.8 |
| 5% | 4.77 | 1.3 |
| 10% | 9.54 | 2.6 |
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 | |
| Aug 1 | 95.00 | 1.24 | 32 | 2.5 | 0.00 (0.0%) | |
| Jul 3 | 95.00 | 0.59 | 3 | 5.3 | 0.00 (0.0%) | |
| 5% Yield On IEF Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 1 | 95.00 | 1.24 | 32 | 2.5 | 0.00 (0.0%) | |
| Jul 3 | 95.00 | 0.59 | 3 | 5.3 | 0.00 (0.0%) | |
| 10% Yield On IEF Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 1 | 95.50 | 0.94 | 32 | 2.9 | 0.07 (0.1%) | |
| Jul 3 | 95.00 | 0.59 | 3 | 5.3 | 0.00 (0.0%) | |
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| Top 10 Open Interest For Jul 18 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | GLD dividend | 1. | RUN dividend | |
| 2. | SLV dividend | 7. | AAPL dividend | 2. | COGT dividend | |
| 3. | SPY dividend | 8. | TLT dividend | 3. | ENPH dividend | |
| 4. | IWM dividend | 9. | FXI dividend | 4. | EOSE dividend | |
| 5. | TSLA dividend | 10. | QQQ dividend | 5. | BYON dividend | |
Want more examples? IDYA Dividend | IEFA Dividend
