SGGB Dividend Type Payments

Although SGGB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on IPATH SER B BLOOMBERG SUGAR SUBINDEX TOTAL RETURN 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):

IPATH SER B BLOOMBERG SUGAR SUBINDEX TOTAL RETURN (SGGB)
Bid Ask Last Change Volume P/E Market Cap
36.39 38.49 37.53 +0.36 15K - 0.0B

SGGB Dividend-Like Income Using Covered Calls

With SGGB at 37.53, 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% 1.13 0.3
5% 1.88 0.5
10% 3.75 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 SGGB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 42.00 0.10 32 0.3 3.51 (9.4%)
Oct 19 40.00 0.70 60 1.2 1.51 (4.0%)
5% Yield On SGGB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 41.00 0.20 32 0.6 2.51 (6.7%)
Oct 19 40.00 0.70 60 1.2 1.51 (4.0%)
10% Yield On SGGB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 39.00 0.50 32 1.6 0.51 (1.4%)
Oct 19 40.00 0.70 60 1.2 1.51 (4.0%)

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