TLT Dividend Type Payments

iShares 20+ YEAR TREASURY BOND dividend

Although TLT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares 20+ YEAR TREASURY BOND to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 10:50 AM ET):

iShares 20+ YEAR TREASURY BOND (TLT)
Bid Ask Last Change Volume P/E Market Cap
113.80 113.81 113.81 -0.15 4.5M - 75B

TLT Dividend-Like Income Using Covered Calls

With TLT at 113.81, 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% 3.41 0.9
5% 5.69 1.6
10% 11.38 3.1

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 TLT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 115.50 0.08 8 1.0 1.69 (1.5%)
Nov 2 115.50 0.22 15 1.5 1.69 (1.5%)
5% Yield On TLT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 115.00 0.19 8 2.4 1.19 (1.0%)
Nov 2 115.00 0.35 15 2.3 1.19 (1.0%)
10% Yield On TLT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 114.50 0.33 8 4.1 0.69 (0.6%)
Nov 2 114.50 0.53 15 3.5 0.69 (0.6%)

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Want more examples? TLRD Dividend | TLTD Dividend