LABU Dividend Type Payments

Although LABU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on DIREXION DAILY S&P BIOTECH BULL to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

DIREXION DAILY S&P BIOTECH BULL (LABU)
Bid Ask Last Change Volume P/E Market Cap
88.29 89.75 88.91 +2.31 848K - 3.8B

LABU Dividend-Like Income Using Covered Calls

With LABU at 88.91, 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% 2.67 0.7
5% 4.45 1.2
10% 8.89 2.4

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 LABU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 101.50 0.10 9 1.1 11.75 (13.2%)
Aug 31 106.50 0.15 16 0.9 16.75 (18.8%)
5% Yield On LABU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 100.00 0.20 9 2.2 10.25 (11.5%)
Aug 31 105.50 0.20 16 1.3 15.75 (17.7%)
10% Yield On LABU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 99.00 0.25 9 2.8 9.25 (10.4%)
Aug 31 102.00 0.40 16 2.5 12.25 (13.8%)

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Want more examples? LABL Dividend | LAD Dividend