QQQ Dividend Type Payments

Although QQQ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on POWERSHARES QQQ to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):

POWERSHARES QQQ (QQQ)
Bid Ask Last Change Volume P/E Market Cap
182.87 182.88 182.70 -0.14 30.3M - 659B

QQQ Dividend-Like Income Using Covered Calls

With QQQ at 182.70, 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% 5.48 1.5
5% 9.14 2.5
10% 18.27 5.0

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 QQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 186.00 0.05 3 1.7 3.12 (1.7%)
Sep 28 187.00 0.16 10 1.6 4.12 (2.3%)
5% Yield On QQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 185.50 0.08 3 2.7 2.62 (1.4%)
Sep 28 186.00 0.30 10 3.0 3.12 (1.7%)
10% Yield On QQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 184.50 0.20 3 6.7 1.62 (0.9%)
Sep 28 185.00 0.57 10 5.7 2.12 (1.2%)

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Top 10 Open Interest For Sep 21 Expiration     Top 5 High Yield
1.EEM dividend 6.GE dividend   1.CRON dividend
2.SPY dividend 7.EWZ dividend   2.TGTX dividend
3.SPX dividend 8.VXX dividend   3.GERN dividend
4.QQQ dividend 9.FXI dividend   4.CGC dividend
5.XLF dividend 10.FB dividend   5.RHT dividend

Want more examples? QQEW Dividend | QQQC Dividend