SPY Dividend Type Payments

SPDR S&P 500 dividend

Although SPY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR 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 Fri 4:16 PM ET):

SPDR S&P 500 (SPY)
Bid Ask Last Change Volume P/E Market Cap
266.43 266.45 266.46 +3.50 116M - 0.0B

SPY Dividend-Like Income Using Covered Calls

With SPY at 266.46, 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% 7.99 2.2
5% 13.32 3.7
10% 26.65 7.3

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 SPY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 25 273.00 0.24 8 3.0 6.55 (2.5%)
Feb 1 275.00 0.44 15 2.9 8.55 (3.2%)
5% Yield On SPY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 25 272.00 0.35 8 4.4 5.55 (2.1%)
Feb 1 274.00 0.57 15 3.8 7.55 (2.8%)
10% Yield On SPY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 25 270.00 0.67 8 8.4 3.55 (1.3%)
Feb 1 271.00 1.21 15 8.1 4.55 (1.7%)

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Top 10 Open Interest For Feb 15 Expiration     Top 5 High Yield
1.SPY dividend 6.AAPL dividend   1. dividend
2.EEM dividend 7.IWM dividend   2. dividend
3.SPX dividend 8.BAC dividend   3. dividend
4.QQQ dividend 9.EWZ dividend   4. dividend
5.FXI dividend 10.HYG dividend   5. dividend

Want more examples? SPXV Dividend | SPYB Dividend