SQQQ Dividend Type Payments

Although SQQQ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES ULTRAPRO SHORT QQQ to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 9:55 AM ET):

PROSHARES ULTRAPRO SHORT QQQ (SQQQ)
Bid Ask Last Change Volume P/E Market Cap
12.31 12.32 12.32 -0.20 2.1M - 13B

SQQQ Dividend-Like Income Using Covered Calls

With SQQQ at 12.32, 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% 0.37 0.1
5% 0.62 0.2
10% 1.23 0.3

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 SQQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 18.00 0.05 37 0.1 5.68 (46.1%)
Oct 19 21.00 0.10 65 0.2 8.68 (70.5%)
5% Yield On SQQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 17.00 0.10 37 0.3 4.68 (38.0%)
Oct 19 20.00 0.15 65 0.2 7.68 (62.3%)
10% Yield On SQQQ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 16.00 0.15 37 0.4 3.68 (29.9%)
Oct 19 17.00 0.25 65 0.4 4.68 (38.0%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
Top 10 Open Interest For Aug 17 Expiration     Top 5 High Yield
1.SPY dividend 6.XLF dividend   1.NVDA dividend
2.EEM dividend 7.FB dividend   2.JWN dividend
3.QQQ dividend 8.FXI dividend   3.AMAT dividend
4.BAC dividend 9.GLD dividend   4.TUR dividend
5.SPX dividend 10.AABA dividend   5.UVXY dividend

Want more examples? SQM Dividend | SR Dividend