UYG Dividend Type Payments

PROSHARES ULTRA FINANCIALS dividend

Although UYG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES ULTRA FINANCIALS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

PROSHARES ULTRA FINANCIALS (UYG)
Bid Ask Last Change Volume P/E Market Cap
42.49 44.00 43.04 -0.60 28K - 8.5B

UYG Dividend-Like Income Using Covered Calls

With UYG at 43.04, 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% 1.29 0.4
5% 2.15 0.6
10% 4.30 1.2

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 UYG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 45.00 0.03 5 0.6 1.00 (2.3%)
Sep 21 47.67 0.15 40 0.4 3.67 (8.5%)
5% Yield On UYG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 45.00 0.03 5 0.6 1.00 (2.3%)
Sep 21 46.33 0.27 40 0.7 2.33 (5.4%)
10% Yield On UYG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 44.33 0.13 5 2.6 0.33 (0.8%)
Sep 21 45.00 0.62 40 1.6 1.00 (2.3%)

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Want more examples? UXI Dividend | UYM Dividend