QQQ Dividend Type Payments
Although QQQ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco QQQ Trust, Series 1 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
| Invesco QQQ Trust, Series 1 (QQQ) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 555.76 |
555.87 |
556.22 |
+5.42 |
25.8M |
- |
200B |
QQQ Dividend-Like Income Using Covered Calls
With QQQ at 556.22, 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% |
16.69 |
4.6 |
| 5% |
27.81 |
7.6 |
| 10% |
55.62 |
15.2 |
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 QQQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
554.00 |
13.23 |
30 |
37.9 |
0.00 (0.0%) |
| Aug 8 |
554.00 |
14.77 |
37 |
34.9 |
0.00 (0.0%) |
| 5% Yield On QQQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
554.00 |
13.23 |
30 |
37.9 |
0.00 (0.0%) |
| Aug 8 |
554.00 |
14.77 |
37 |
34.9 |
0.00 (0.0%) |
| 10% Yield On QQQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
554.00 |
13.23 |
30 |
37.9 |
0.00 (0.0%) |
| Aug 8 |
554.00 |
14.77 |
37 |
34.9 |
0.00 (0.0%) |
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