VIXM Dividend Type Payments

PROSHARES VIX MID-TERM FUTURES dividend

Although VIXM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES VIX MID-TERM FUTURES to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 12:40 PM ET):

PROSHARES VIX MID-TERM FUTURES (VIXM)
Bid Ask Last Change Volume P/E Market Cap
23.59 23.65 23.64 +0.26 16K - 0.2B

VIXM Dividend-Like Income Using Covered Calls

With VIXM at 23.64, 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% 0.71 0.2
5% 1.18 0.3
10% 2.36 0.6

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 VIXM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 26.50 0.05 5 1.0 2.85 (12.1%)
Nov 2 29.00 0.05 12 0.4 5.35 (22.6%)
5% Yield On VIXM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 26.50 0.05 5 1.0 2.85 (12.1%)
Nov 2 29.00 0.05 12 0.4 5.35 (22.6%)
10% Yield On VIXM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 26.50 0.05 5 1.0 2.85 (12.1%)
Nov 2 28.00 0.10 12 0.8 4.35 (18.4%)

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