PDD Dividend Type Payments

Although PDD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Pinduoduo, Inc ADS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 1:25 PM ET):

Pinduoduo, Inc ADS (PDD)
Bid Ask Last Change Volume P/E Market Cap
29.06 29.07 29.06 +1.54 6.3M - 2.5B

PDD Dividend-Like Income Using Covered Calls

With PDD at 29.06, 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% 0.87 0.2
5% 1.45 0.4
10% 2.91 0.8

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 PDD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 40.00 0.10 25 0.4 10.93 (37.6%)
Apr 18 40.00 0.35 59 0.6 10.93 (37.6%)
5% Yield On PDD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 40.00 0.10 25 0.4 10.93 (37.6%)
Apr 18 40.00 0.35 59 0.6 10.93 (37.6%)
10% Yield On PDD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 35.00 0.50 25 2.0 5.93 (20.4%)
Apr 18 35.00 1.05 59 1.8 5.93 (20.4%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
Top 10 Open Interest For Mar 15 Expiration     Top 5 High Yield
1.SPX dividend 6.EWZ dividend   1.ROKU dividend
2.EEM dividend 7.GE dividend   2.BHC dividend
3.SPY dividend 8.BAC dividend   3.IQ dividend
4.QQQ dividend 9.XOP dividend   4.DBX dividend
5.FXI dividend 10.GLD dividend   5.VIPS dividend

Want more examples? PDCO Dividend | PDFS Dividend