QQEW Dividend Type Payments

Although QQEW has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on FIRST TRUST NASDAQ-100 EQUAL W to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 11:20 AM ET):

FIRST TRUST NASDAQ-100 EQUAL W (QQEW)
Bid Ask Last Change Volume P/E Market Cap
60.26 60.29 60.27 +0.22 1K - 5.3B

QQEW Dividend-Like Income Using Covered Calls

With QQEW at 60.27, 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% 1.81 0.5
5% 3.01 0.8
10% 6.03 1.7

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 QQEW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 60.00 0.75 60 0.8 0.00 (0.0%)
Oct 19 63.00 0.75 151 0.5 2.71 (4.5%)
5% Yield On QQEW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 61.00 1.70 151 1.1 0.71 (1.2%)
Jan 18 61.00 2.30 242 1.0 0.71 (1.2%)

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