OEF Dividend Type Payments

iShares S&P 100 Index dividend

Although OEF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares S&P 100 Index 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):

iShares S&P 100 Index (OEF)
Bid Ask Last Change Volume P/E Market Cap
113.69 116.51 116.08 -2.38 985K - 0.0B

OEF Dividend-Like Income Using Covered Calls

With OEF at 116.08, 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% 3.48 1.0
5% 5.80 1.6
10% 11.61 3.2

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 OEF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 118.00 0.25 8 3.1 1.49 (1.3%)
Jan 18 121.00 0.40 36 1.1 4.49 (3.9%)
5% Yield On OEF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 118.00 0.25 8 3.1 1.49 (1.3%)
Jan 18 120.00 0.65 36 1.8 3.49 (3.0%)
10% Yield On OEF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 117.00 0.45 8 5.6 0.49 (0.4%)
Jan 18 119.00 1.15 36 3.2 2.49 (2.1%)

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