SCHB Dividend Type Payments

Although SCHB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Schwab US Broad Market 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):

Schwab US Broad Market ETF (SCHB)
Bid Ask Last Change Volume P/E Market Cap
62.06 63.28 62.21 -1.15 4.0M - 0.0B

SCHB Dividend-Like Income Using Covered Calls

With SCHB at 62.21, 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% 1.87 0.5
5% 3.11 0.9
10% 6.22 1.7

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 SCHB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 64.00 0.45 36 1.3 0.72 (1.2%)
Apr 18 65.00 1.00 126 0.8 1.72 (2.8%)
5% Yield On SCHB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 64.00 0.45 36 1.3 0.72 (1.2%)
Apr 18 64.00 1.50 126 1.2 0.72 (1.2%)
10% Yield On SCHB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 63.00 0.90 36 1.7 0.00 (0.0%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
1.SPY dividend 6.EWZ dividend   1. dividend
2.EEM dividend 7.FXI dividend   2. dividend
3.SPX dividend 8.GE dividend   3. dividend
4.QQQ dividend 9.BAC dividend   4. dividend
5.IWM dividend 10.VXX dividend   5. dividend

Want more examples? SCHA Dividend | SCHC Dividend