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 Fri 4:16 PM ET):
Invesco QQQ Trust, Series 1 (QQQ) |
Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
463.03 |
463.06 |
462.97 |
+4.70 |
39.7M |
- |
166B |
QQQ Dividend-Like Income Using Covered Calls
With QQQ at 462.97, 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% |
13.89 |
3.8 |
5% |
23.15 |
6.3 |
10% |
46.30 |
12.7 |
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 QQQ Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Aug 2 |
461.00 |
8.04 |
8 |
74.8 |
0.00 (0.0%) |
Aug 9 |
461.00 |
10.03 |
15 |
53.1 |
0.00 (0.0%) |
5% Yield On QQQ Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Aug 2 |
461.00 |
8.04 |
8 |
74.8 |
0.00 (0.0%) |
Aug 9 |
461.00 |
10.03 |
15 |
53.1 |
0.00 (0.0%) |
10% Yield On QQQ Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Aug 2 |
461.00 |
8.04 |
8 |
74.8 |
0.00 (0.0%) |
Aug 9 |
461.00 |
10.03 |
15 |
53.1 |
0.00 (0.0%) |
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