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 Tue 4:16 PM ET):

SPDR S&P Dividend ETF (SDY)
Bid Ask Last Change Volume P/E Market Cap
98.24 99.99 98.86 +0.36 703K - 0.0B

SDY Dividend-Like Income Using Covered Calls

With SDY at 98.86, 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% 2.97 0.8
5% 4.94 1.4
10% 9.89 2.7

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 SDY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 100.00 0.25 25 1.0 0.01 (0.0%)
Apr 18 100.00 0.95 59 1.6 0.01 (0.0%)
5% Yield On SDY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 100.00 0.95 59 1.6 0.01 (0.0%)

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Top 10 Open Interest For Mar 15 Expiration     Top 5 High Yield
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Want more examples? SDT Dividend | SDYL Dividend