NET Dividend Type Payments
Although NET has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Cloudflare, Inc. Class A 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):
| Cloudflare, Inc. Class A (NET) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 201.00 |
202.44 |
202.44 |
-5.51 |
2.1M |
- |
73B |
NET Dividend-Like Income Using Covered Calls
With NET at 202.44, 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% |
6.07 |
1.7 |
| 5% |
10.12 |
2.8 |
| 10% |
20.24 |
5.5 |
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 NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
202.50 |
4.90 |
8 |
61.3 |
0.06 (0.0%) |
| Dec 26 |
202.50 |
6.40 |
15 |
42.7 |
0.06 (0.0%) |
| 5% Yield On NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
202.50 |
4.90 |
8 |
61.3 |
0.06 (0.0%) |
| Dec 26 |
202.50 |
6.40 |
15 |
42.7 |
0.06 (0.0%) |
| 10% Yield On NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
202.50 |
4.90 |
8 |
61.3 |
0.06 (0.0%) |
| Dec 26 |
202.50 |
6.40 |
15 |
42.7 |
0.06 (0.0%) |
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