KRE Dividend Type Payments
Although KRE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on State Street SPDR S&P Regional Banking ETF 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):
| State Street SPDR S&P Regional Banking ETF (KRE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 67.20 |
67.25 |
67.24 |
-0.24 |
16.1M |
- |
4.2B |
KRE Dividend-Like Income Using Covered Calls
With KRE at 67.24, 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% |
2.02 |
0.6 |
| 5% |
3.36 |
0.9 |
| 10% |
6.72 |
1.8 |
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 KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 15 |
67.00 |
2.51 |
148 |
1.5 |
0.00 (0.0%) |
| Jan 16 |
67.00 |
0.52 |
29 |
0.9 |
0.00 (0.0%) |
| 5% Yield On KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 15 |
67.00 |
2.51 |
148 |
1.5 |
0.00 (0.0%) |
| Jan 16 |
67.00 |
0.52 |
29 |
0.9 |
0.00 (0.0%) |
| 10% Yield On KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
68.00 |
1.01 |
29 |
3.5 |
0.75 (1.1%) |
| Mar 20 |
70.00 |
2.04 |
92 |
2.2 |
2.75 (4.1%) |
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