UCO Dividend Type Payments

Proshares Ultra Bloomberg Crud dividend

Although UCO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Proshares Ultra Bloomberg Crud to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

Proshares Ultra Bloomberg Crud (UCO)
Bid Ask Last Change Volume P/E Market Cap
21.33 21.35 21.30 -0.23 2.0M - 0.0B

UCO Dividend-Like Income Using Covered Calls

With UCO at 21.30, 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% 0.64 0.2
5% 1.07 0.3
10% 2.13 0.6

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 UCO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 29 24.00 0.02 9 0.2 2.65 (12.4%)
Apr 5 24.50 0.04 16 0.3 3.15 (14.8%)
5% Yield On UCO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 29 23.50 0.04 9 0.4 2.15 (10.1%)
Apr 5 24.00 0.09 16 0.6 2.65 (12.4%)
10% Yield On UCO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 29 23.00 0.09 9 1.0 1.65 (7.7%)
Apr 5 23.50 0.15 16 0.9 2.15 (10.1%)

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