ITA Dividend Type Payments

I SHARES US AEROSPACE & DEFENSE dividend

Although ITA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on I SHARES US AEROSPACE & DEFENSE 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):

I SHARES US AEROSPACE & DEFENSE (ITA)
Bid Ask Last Change Volume P/E Market Cap
200.01 205.07 201.95 -1.11 205K - 53B

ITA Dividend-Like Income Using Covered Calls

With ITA at 201.95, 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% 6.06 1.7
5% 10.10 2.8
10% 20.20 5.5

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 ITA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 210.00 1.15 29 4.0 4.93 (2.4%)
Jan 18 215.00 2.10 92 2.3 9.93 (4.9%)
5% Yield On ITA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 210.00 1.15 29 4.0 4.93 (2.4%)
Jan 18 210.00 3.90 92 4.2 4.93 (2.4%)
10% Yield On ITA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 205.00 2.75 29 9.2 0.00 (0.0%)
Jan 18 205.00 5.90 92 6.3 0.00 (0.0%)

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