LI Dividend Type Payments
Although LI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Li Auto Inc. - American Depositary Shares 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):
| Li Auto Inc. - American Depositary Shares (LI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 25.24 |
25.30 |
25.24 |
-0.86 |
4.7M |
47 |
0.0B |
LI Dividend-Like Income Using Covered Calls
With LI at 25.24, 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% |
0.76 |
0.2 |
| 5% |
1.26 |
0.3 |
| 10% |
2.52 |
0.7 |
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 LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 5 |
26.00 |
1.37 |
36 |
3.8 |
0.70 (2.8%) |
| Aug 8 |
25.50 |
0.58 |
8 |
7.3 |
0.20 (0.8%) |
| 5% Yield On LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 5 |
26.00 |
1.37 |
36 |
3.8 |
0.70 (2.8%) |
| Aug 8 |
25.50 |
0.58 |
8 |
7.3 |
0.20 (0.8%) |
| 10% Yield On LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 5 |
26.00 |
1.37 |
36 |
3.8 |
0.70 (2.8%) |
| Aug 8 |
25.50 |
0.58 |
8 |
7.3 |
0.20 (0.8%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
