OEF Dividend Type Payments

iShares S&P 100 ETF dividend

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

iShares S&P 100 ETF (OEF)
Bid Ask Last Change Volume P/E Market Cap
291.11 293.88 291.68 -1.14 261K - 15B

OEF Dividend-Like Income Using Covered Calls

With OEF at 291.68, 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% 8.75 2.4
5% 14.58 4.0
10% 29.17 8.0

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
Aug 15 295.00 4.50 57 7.9 1.12 (0.4%)
Jul 18 295.00 1.40 29 4.8 1.12 (0.4%)
5% Yield On OEF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 295.00 4.50 57 7.9 1.12 (0.4%)
Jul 18 295.00 1.40 29 4.8 1.12 (0.4%)
10% Yield On OEF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 295.00 7.40 92 8.0 1.12 (0.4%)

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