SPYD Dividend Type Payments
Although SPYD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Series Trust SPDR Portfolio S&P 500 High 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 Series Trust SPDR Portfolio S&P 500 High Dividend ETF (SPYD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 41.70 |
42.10 |
41.89 |
+0.08 |
683K |
- |
0.0B |
SPYD Dividend-Like Income Using Covered Calls
With SPYD at 41.89, here's a table showing how big the annual "dividend" (i.e. 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% |
1.26 |
0.3 |
| 5% |
2.09 |
0.6 |
| 10% |
4.19 |
1.1 |
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 SPYD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
42.00 |
0.45 |
18 |
1.9 |
0.00 (0.0%) |
| Sep 19 |
42.00 |
0.75 |
144 |
0.5 |
0.00 (0.0%) |
| 5% Yield On SPYD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
42.00 |
0.45 |
18 |
1.9 |
0.00 (0.0%) |
| Dec 19 |
43.00 |
1.50 |
235 |
0.6 |
0.90 (2.1%) |
| 10% Yield On SPYD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
42.00 |
0.45 |
18 |
1.9 |
0.00 (0.0%) |
| Jun 20 |
42.00 |
0.85 |
53 |
1.4 |
0.00 (0.0%) |
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