SDS Dividend Type Payments
Although SDS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES ULTRA-SHORT S&P 500 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):
| PROSHARES ULTRA-SHORT S&P 500 (SDS) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 36.83 | 36.85 | 36.81 | +0.31 | 6.5M | - | 18B |
SDS Dividend-Like Income Using Covered Calls
With SDS at 36.81, 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% | 1.10 | 0.3 |
| 5% | 1.84 | 0.5 |
| 10% | 3.68 | 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 SDS Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Oct 26 | 42.00 | 0.02 | 5 | 0.4 | 5.15 (14.0%) | |
| Nov 2 | 45.00 | 0.04 | 12 | 0.3 | 8.15 (22.1%) | |
| 5% Yield On SDS Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Oct 26 | 40.50 | 0.04 | 5 | 0.8 | 3.65 (9.9%) | |
| Nov 2 | 42.00 | 0.09 | 12 | 0.8 | 5.15 (14.0%) | |
| 10% Yield On SDS Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Oct 26 | 40.00 | 0.06 | 5 | 1.2 | 3.15 (8.6%) | |
| Nov 2 | 41.00 | 0.15 | 12 | 1.3 | 4.15 (11.3%) | |
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| Top 10 Open Interest For Nov 16 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPY dividend | 6. | SPX dividend | 1. | AMD dividend | |
| 2. | EWZ dividend | 7. | VXX dividend | 2. | SNAP dividend | |
| 3. | EEM dividend | 8. | FXI dividend | 3. | TWTR dividend | |
| 4. | PBR dividend | 9. | IWM dividend | 4. | UVXY dividend | |
| 5. | QQQ dividend | 10. | BAC dividend | 5. | AKS dividend | |
Want more examples? SDRL Dividend | SDT Dividend
