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 4:16 PM ET):

ProShares UltraShort S&P500 (SDS)
Bid Ask Last Change Volume P/E Market Cap
40.56 40.60 40.60 +1.47 8.7M - 0.0B

SDS Dividend-Like Income Using Covered Calls

With SDS at 40.60, 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% 1.22 0.3
5% 2.03 0.6
10% 4.06 1.1

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
Dec 21 46.00 0.03 8 0.4 5.40 (13.3%)
Dec 28 46.50 0.14 15 0.9 5.90 (14.5%)
5% Yield On SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 45.00 0.07 8 0.9 4.40 (10.8%)
Dec 28 46.50 0.14 15 0.9 5.90 (14.5%)
10% Yield On SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 44.50 0.14 8 1.8 3.90 (9.6%)
Dec 28 45.00 0.24 15 1.6 4.40 (10.8%)

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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? SDRL Dividend | SDT Dividend