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
180.95 181.00 181.02 -0.81 23.4M - 72B

QQQ Dividend-Like Income Using Covered Calls

With QQQ at 181.02, 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% 5.43 1.5
5% 9.05 2.5
10% 18.10 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
May 24 185.00 0.05 3 1.7 4.00 (2.2%)
May 31 187.00 0.19 10 1.9 6.00 (3.3%)
5% Yield On QQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 24 184.50 0.09 3 3.0 3.50 (1.9%)
May 31 186.50 0.25 10 2.5 5.50 (3.0%)
10% Yield On QQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 24 184.00 0.15 3 5.0 3.00 (1.7%)
May 31 185.00 0.54 10 5.4 4.00 (2.2%)

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Want more examples? QQEW Dividend | QQQC Dividend