RWM Dividend Type Payments

PROSHARES SHORT RUSSELL 2000 dividend

Although RWM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES SHORT RUSSELL 2000 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):

PROSHARES SHORT RUSSELL 2000 (RWM)
Bid Ask Last Change Volume P/E Market Cap
37.81 37.90 37.89 -0.16 407K - 4.9B

RWM Dividend-Like Income Using Covered Calls

With RWM at 37.89, 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% 1.14 0.3
5% 1.89 0.5
10% 3.79 1.0

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 RWM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 39.00 0.25 36 0.7 1.10 (2.9%)
Oct 19 41.00 0.20 64 0.3 3.10 (8.2%)
5% Yield On RWM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 39.00 0.25 36 0.7 1.10 (2.9%)
Oct 19 39.00 0.45 64 0.7 1.10 (2.9%)
10% Yield On RWM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 38.00 0.50 36 1.4 0.10 (0.3%)
Oct 19 38.00 0.75 64 1.2 0.10 (0.3%)

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Top 10 Open Interest For Sep 21 Expiration     Top 5 High Yield
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Want more examples? RWL Dividend | RWO Dividend