UMDD Dividend Type Payments

Although UMDD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES ULTRAPRO MID-CAP 400 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 12:50 PM ET):

PROSHARES ULTRAPRO MID-CAP 400 (UMDD)
Bid Ask Last Change Volume P/E Market Cap
125.28 125.63 124.28 -4.04 3K - 0.4B

UMDD Dividend-Like Income Using Covered Calls

With UMDD at 124.28, 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% 3.73 1.0
5% 6.21 1.7
10% 12.43 3.4

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 UMDD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 129.00 0.50 38 1.3 3.37 (2.7%)
Oct 19 133.00 1.00 66 1.5 7.37 (5.9%)
5% Yield On UMDD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 128.00 1.00 38 2.6 2.37 (1.9%)
Oct 19 131.00 1.50 66 2.3 5.37 (4.3%)
10% Yield On UMDD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 127.00 1.50 38 3.9 1.37 (1.1%)
Oct 19 129.00 2.50 66 3.8 3.37 (2.7%)

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