SDS Dividend Type Payments

ProShares UltraShort S&P500 dividend

Although SDS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ProShares UltraShort S&P500 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 1:55 PM ET):

ProShares UltraShort S&P500 (SDS)
Bid Ask Last Change Volume P/E Market Cap
17.91 17.92 17.92 -0.34 10.0M - 0.5B

SDS Dividend-Like Income Using Covered Calls

With SDS at 17.92, 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% 0.54 0.1
5% 0.90 0.2
10% 1.79 0.5

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 SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 18 18.00 0.60 43 1.4 0.08 (0.4%)
Sep 19 18.00 1.20 106 1.1 0.08 (0.4%)
5% Yield On SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 18 18.00 0.60 43 1.4 0.08 (0.4%)
Sep 19 18.00 1.20 106 1.1 0.08 (0.4%)
10% Yield On SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 18 18.00 0.60 43 1.4 0.08 (0.4%)
Sep 19 18.00 1.20 106 1.1 0.08 (0.4%)

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