UWM Dividend Type Payments

PROSHARES ULTRA RUSSELL 2000 dividend

Although UWM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES ULTRA RUSSELL 2000 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 RUSSELL 2000 (UWM)
Bid Ask Last Change Volume P/E Market Cap
83.64 83.84 83.51 +1.42 81K - 2.5B

UWM Dividend-Like Income Using Covered Calls

With UWM at 83.51, 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% 2.51 0.7
5% 4.18 1.1
10% 8.35 2.3

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 UWM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 88.00 0.65 37 1.8 4.16 (5.0%)
Oct 19 92.00 0.45 65 0.7 8.16 (9.8%)
5% Yield On UWM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 88.00 0.65 37 1.8 4.16 (5.0%)
Oct 19 90.00 0.90 65 1.4 6.16 (7.4%)
10% Yield On UWM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 87.00 0.90 37 2.4 3.16 (3.8%)
Oct 19 87.00 1.85 65 2.8 3.16 (3.8%)

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