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 Wed 4:16 PM ET):
Proshares Ultra 7-10-Year Treasury (UST) | ||||||
---|---|---|---|---|---|---|
Bid | Ask | Last | Change | Volume | P/E | Market Cap |
56.18 | 56.21 | 56.20 | +0.01 | 8K | - | 0.0B |
UST Dividend-Like Income Using Covered Calls
With UST at 56.20, 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% | 1.69 | 0.5 |
5% | 2.81 | 0.8 |
10% | 5.62 | 1.5 |
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 | |
Mar 15 | 56.00 | 0.40 | 24 | 0.8 | 0.00 (0.0%) | |
Apr 18 | 57.00 | 0.30 | 58 | 0.5 | 0.79 (1.4%) |
5% Yield On UST Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
Mar 15 | 56.00 | 0.40 | 24 | 0.8 | 0.00 (0.0%) |
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Top 10 Open Interest For Mar 15 Expiration | Top 5 High Yield | |||||
---|---|---|---|---|---|---|
1. | SPX dividend | 6. | EWZ dividend | 1. | VIPS dividend | |
2. | EEM dividend | 7. | GE dividend | 2. | ROKU dividend | |
3. | SPY dividend | 8. | BAC dividend | 3. | FSLR dividend | |
4. | QQQ dividend | 9. | XOP dividend | 4. | IQ dividend | |
5. | FXI dividend | 10. | LLY dividend | 5. | TTD dividend |
Want more examples? USRT Dividend | USTB Dividend