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 Fri 4:16 PM ET):
| Proshares Ultra 7-10-Year Treasury (UST) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 54.21 | 54.28 | 54.28 | +0.19 | 34K | - | 0.0B |
UST Dividend-Like Income Using Covered Calls
With UST at 54.28, 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% | 1.63 | 0.4 |
| 5% | 2.71 | 0.7 |
| 10% | 5.43 | 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 | |
| Jan 18 | 55.00 | 0.20 | 36 | 0.6 | 0.72 (1.3%) | |
| Feb 15 | 55.00 | 0.40 | 64 | 0.6 | 0.72 (1.3%) | |
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| Top 10 Open Interest For Dec 21 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPY dividend | 6. | EWZ dividend | 1. | dividend | |
| 2. | EEM dividend | 7. | FXI dividend | 2. | dividend | |
| 3. | SPX dividend | 8. | GE dividend | 3. | dividend | |
| 4. | QQQ dividend | 9. | BAC dividend | 4. | dividend | |
| 5. | IWM dividend | 10. | VXX dividend | 5. | dividend | |
Want more examples? USRT Dividend | USTB Dividend
