RSP Dividend Type Payments
Although RSP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco S&P 500 Equal Weight ETF 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 S&P 500 Equal Weight ETF (RSP) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 171.89 | 172.45 | 171.89 | +2.98 | 6.8M | 155 | 13B |
RSP Dividend-Like Income Using Covered Calls
With RSP at 171.89, 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% | 5.16 | 1.4 |
| 5% | 8.59 | 2.4 |
| 10% | 17.19 | 4.7 |
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 RSP Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jun 20 | 175.00 | 1.00 | 50 | 2.0 | 2.55 (1.5%) | |
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| Top 10 Open Interest For May 16 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | IWM dividend | 1. | APP dividend | |
| 2. | SPY dividend | 7. | FXI dividend | 2. | CVI dividend | |
| 3. | TLT dividend | 8. | GLD dividend | 3. | PTON dividend | |
| 4. | SLV dividend | 9. | TSLA dividend | 4. | PINS dividend | |
| 5. | QQQ dividend | 10. | INTC dividend | 5. | UPST dividend | |
Want more examples? RSI Dividend | RTH Dividend
