SDY Dividend Type Payments

Although SDY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Dividend 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):

SPDR S&P Dividend ETF (SDY)
Bid Ask Last Change Volume P/E Market Cap
94.16 94.75 94.44 -0.10 539K - 0.0B

SDY Dividend-Like Income Using Covered Calls

With SDY at 94.44, 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% 2.83 0.8
5% 4.72 1.3
10% 9.44 2.6

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 SDY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 96.00 0.20 9 2.2 1.25 (1.3%)
Jan 18 97.00 0.40 37 1.1 2.25 (2.4%)
5% Yield On SDY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 96.00 0.20 9 2.2 1.25 (1.3%)
Jan 18 96.00 0.85 37 2.3 1.25 (1.3%)
10% Yield On SDY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 95.00 0.45 9 5.0 0.25 (0.3%)
Jan 18 95.00 1.30 37 3.5 0.25 (0.3%)

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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
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4.QQQ dividend 9.VXX dividend   4. dividend
5.IWM dividend 10.BAC dividend   5. dividend

Want more examples? SDT Dividend | SDYL Dividend