TZA Dividend Type Payments

DIREXION DAILY SM-CAP BEAR dividend

Although TZA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on DIREXION DAILY SM-CAP BEAR to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 9:35 AM ET):

DIREXION DAILY SM-CAP BEAR (TZA)
Bid Ask Last Change Volume P/E Market Cap
10.25 10.26 10.26 +0.18 342K - 3.5B

TZA Dividend-Like Income Using Covered Calls

With TZA at 10.26, 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% 0.31 0.1
5% 0.51 0.1
10% 1.03 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 TZA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 12.50 0.04 9 0.4 2.24 (21.8%)
Nov 2 13.00 0.02 16 0.1 2.74 (26.7%)
5% Yield On TZA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 12.50 0.04 9 0.4 2.24 (21.8%)
Nov 2 12.00 0.07 16 0.4 1.74 (17.0%)
10% Yield On TZA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 12.50 0.04 9 0.4 2.24 (21.8%)
Nov 2 12.00 0.07 16 0.4 1.74 (17.0%)

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Want more examples? TYPE Dividend | TZOO Dividend