TRV Dividend

Although TRV has a dividend of 1.10 with an ex-dividend date of Mar 10, you can sell covered calls on The Travelers Companies, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 1:05 PM ET):

The Travelers Companies, Inc. (TRV)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
280.87	281.10	280.99	-0.28	497K	11	63B

TRV Dividend-Like Income Using Covered Calls

With TRV at 280.99, 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%	8.43	2.3
5%	14.05	3.8
10%	28.10	7.7

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 TRV Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 15	280.00	14.10	108	12.0	0.00 (0.0%)
Apr 17	280.00	11.30	80	12.8	0.00 (0.0%)

5% Yield On TRV Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 15	280.00	14.10	108	12.0	0.00 (0.0%)
Apr 17	280.00	11.30	80	12.8	0.00 (0.0%)

10% Yield On TRV Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 15	280.00	14.10	108	12.0	0.00 (0.0%)
Apr 17	280.00	11.30	80	12.8	0.00 (0.0%)

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