SCHE Dividend Type Payments
Although SCHE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Schwab Emerging Markets Equity ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
| Schwab Emerging Markets Equity ETF (SCHE) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 24.99 | 25.49 | 25.28 | +0.08 | 806K | - | 8.8B |
SCHE Dividend-Like Income Using Covered Calls
With SCHE at 25.28, 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% | 0.76 | 0.2 |
| 5% | 1.26 | 0.3 |
| 10% | 2.53 | 0.7 |
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 SCHE Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Oct 18 | 26.00 | 0.60 | 177 | 0.3 | 0.51 (2.0%) | |
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| Top 10 Open Interest For May 17 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | QQQ dividend | 6. | EEM dividend | 1. | WOLF dividend | |
| 2. | HYG dividend | 7. | KWEB dividend | 2. | FSLY dividend | |
| 3. | IWM dividend | 8. | SLV dividend | 3. | INTC dividend | |
| 4. | SPY dividend | 9. | TSLA dividend | 4. | GRPN dividend | |
| 5. | FXI dividend | 10. | NVDA dividend | 5. | MPW dividend | |
Want more examples? SCHD Dividend | SCHF Dividend
