UST Dividend Type Payments
Although UST has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ProShares Ultra 7-10 Year Treasury to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 3:10 PM ET):
ProShares Ultra 7-10 Year Treasury (UST) | ||||||
---|---|---|---|---|---|---|
Bid | Ask | Last | Change | Volume | P/E | Market Cap |
40.12 | 40.25 | 40.24 | -0.27 | 1K | - | 0.0B |
UST Dividend-Like Income Using Covered Calls
With UST at 40.24, 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% | 1.21 | 0.3 |
5% | 2.01 | 0.6 |
10% | 4.02 | 1.1 |
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 UST Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
May 17 | 41.00 | 0.20 | 23 | 0.9 | 0.75 (1.9%) | |
Jun 21 | 41.00 | 0.55 | 58 | 0.9 | 0.75 (1.9%) |
5% Yield On UST Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
May 17 | 41.00 | 0.20 | 23 | 0.9 | 0.75 (1.9%) | |
Jun 21 | 41.00 | 0.55 | 58 | 0.9 | 0.75 (1.9%) |
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Top 10 Open Interest For May 17 Expiration | Top 5 High Yield | |||||
---|---|---|---|---|---|---|
1. | QQQ dividend | 6. | EEM dividend | 1. | FSLY dividend | |
2. | HYG dividend | 7. | KWEB dividend | 2. | WOLF dividend | |
3. | IWM dividend | 8. | SLV dividend | 3. | SNAP dividend | |
4. | SPY dividend | 9. | TSLA dividend | 4. | PINS dividend | |
5. | FXI dividend | 10. | NVDA dividend | 5. | UPST dividend |
Want more examples? USSG Dividend | UTES Dividend