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 Mon 4:16 PM ET):

POWERSHARES QQQ (QQQ)
Bid Ask Last Change Volume P/E Market Cap
162.42 162.45 162.06 -5.44 64.6M - 659B

QQQ Dividend-Like Income Using Covered Calls

With QQQ at 162.06, 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% 4.86 1.3
5% 8.10 2.2
10% 16.21 4.4

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
Nov 23 169.50 0.07 5 1.4 7.05 (4.4%)
Nov 30 172.50 0.18 12 1.5 10.05 (6.2%)
5% Yield On QQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 168.50 0.13 5 2.6 6.05 (3.7%)
Nov 30 171.00 0.31 12 2.6 8.55 (5.3%)
10% Yield On QQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 167.00 0.31 5 6.2 4.55 (2.8%)
Nov 30 169.00 0.61 12 5.1 6.55 (4.0%)

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

 
Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
1.SPY dividend 6.FXI dividend   1.UVXY dividend
2.SPX dividend 7.IWM dividend   2.VOD dividend
3.EEM dividend 8.PBR dividend   3.AMD dividend
4.QQQ dividend 9.F dividend   4.GBT dividend
5.EWZ dividend 10.BAC dividend   5.TSRO dividend

Want more examples? QQEW Dividend | QQQC Dividend