QTEC Dividend Type Payments
Although QTEC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on First Trust NASDAQ-100-Technology Sector Index Fund 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):
| First Trust NASDAQ-100-Technology Sector Index Fund (QTEC) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 227.24 |
228.77 |
228.18 |
+8.24 |
358K |
- |
0.2B |
QTEC Dividend-Like Income Using Covered Calls
With QTEC at 228.18, 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% |
6.85 |
1.9 |
| 5% |
11.41 |
3.1 |
| 10% |
22.82 |
6.3 |
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 QTEC Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 20 |
230.00 |
2.10 |
15 |
14.0 |
1.23 (0.5%) |
| Mar 20 |
230.00 |
6.70 |
43 |
15.6 |
1.23 (0.5%) |
| 5% Yield On QTEC Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 20 |
230.00 |
2.10 |
15 |
14.0 |
1.23 (0.5%) |
| Mar 20 |
230.00 |
6.70 |
43 |
15.6 |
1.23 (0.5%) |
| 10% Yield On QTEC Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 20 |
230.00 |
2.10 |
15 |
14.0 |
1.23 (0.5%) |
| Mar 20 |
230.00 |
6.70 |
43 |
15.6 |
1.23 (0.5%) |
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