IYM Dividend Type Payments

iShares DJ US BASIC MAT dividend

Although IYM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares DJ US BASIC MAT 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):

iShares DJ US BASIC MAT (IYM)
Bid Ask Last Change Volume P/E Market Cap
99.38 100.28 99.92 +0.71 40K - 6.6B

IYM Dividend-Like Income Using Covered Calls

With IYM at 99.92, 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% 5.00 1.4
10% 9.99 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 IYM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 101.00 0.10 4 2.5 0.72 (0.7%)
Sep 21 104.00 0.40 39 1.0 3.72 (3.7%)
5% Yield On IYM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 101.00 0.10 4 2.5 0.72 (0.7%)
Sep 21 103.00 0.55 39 1.4 2.72 (2.7%)
10% Yield On IYM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 100.00 0.45 4 4.3 0.00 (0.0%)
Sep 21 101.00 1.25 39 3.2 0.72 (0.7%)

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Top 10 Open Interest For Aug 17 Expiration     Top 5 High Yield
1.SPY dividend 6.BAC dividend   1.M dividend
2.EEM dividend 7.AABA dividend   2.UVXY dividend
3.QQQ dividend 8.FXI dividend   3.JWN dividend
4.SPX dividend 9.FB dividend   4.CGC dividend
5.XLF dividend 10.GLD dividend   5.A dividend

Want more examples? IYK Dividend | IYR Dividend