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 |
430.98 |
430.99 |
431.00 |
+6.55 |
41.5M |
- |
154B |
QQQ Dividend-Like Income Using Covered Calls
With QQQ at 431.00, 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% |
12.93 |
3.5 |
5% |
21.55 |
5.9 |
10% |
43.10 |
11.8 |
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 3 |
429.00 |
5.92 |
8 |
49.1 |
0.00 (0.0%) |
May 10 |
429.00 |
7.61 |
15 |
37.5 |
0.00 (0.0%) |
5% Yield On QQQ Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
May 3 |
429.00 |
5.92 |
8 |
49.1 |
0.00 (0.0%) |
May 10 |
429.00 |
7.61 |
15 |
37.5 |
0.00 (0.0%) |
10% Yield On QQQ Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
May 3 |
429.00 |
5.92 |
8 |
49.1 |
0.00 (0.0%) |
May 10 |
429.00 |
7.61 |
15 |
37.5 |
0.00 (0.0%) |
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