IWN Dividend Type Payments

iShares RUSSELL 2000 VALUE IND dividend

Although IWN has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares RUSSELL 2000 VALUE IND to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 10:35 AM ET):

iShares RUSSELL 2000 VALUE IND (IWN)
Bid Ask Last Change Volume P/E Market Cap
123.08 123.10 123.14 +0.81 112K - 105B

IWN Dividend-Like Income Using Covered Calls

With IWN at 123.14, 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% 3.69 1.0
5% 6.16 1.7
10% 12.31 3.4

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 IWN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 125.00 0.25 3 8.3 1.90 (1.5%)
Dec 21 130.00 0.45 38 1.2 6.90 (5.6%)
5% Yield On IWN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 125.00 0.25 3 8.3 1.90 (1.5%)
Dec 21 129.00 0.70 38 1.8 5.90 (4.8%)
10% Yield On IWN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 125.00 0.25 3 8.3 1.90 (1.5%)
Dec 21 126.00 1.55 38 4.1 2.90 (2.4%)

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