VXX Dividend Type Payments
Although VXX has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iPath Series B S&P 500 VIX Short-Term Futures ETN 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):
| iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 28.81 | 28.83 | 28.94 | +0.42 | 30.7M | - | 0.0B |
VXX Dividend-Like Income Using Covered Calls
With VXX at 28.94, 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% | 0.87 | 0.2 |
| 5% | 1.45 | 0.4 |
| 10% | 2.89 | 0.8 |
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 VXX Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| May 24 | 40.00 | 0.02 | 5 | 0.4 | 11.17 (38.6%) | |
| May 31 | 49.00 | 0.03 | 12 | 0.3 | 20.17 (69.7%) | |
| 5% Yield On VXX Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| May 24 | 40.00 | 0.02 | 5 | 0.4 | 11.17 (38.6%) | |
| May 31 | 45.00 | 0.05 | 12 | 0.4 | 16.17 (55.9%) | |
| 10% Yield On VXX Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| May 24 | 37.00 | 0.04 | 5 | 0.8 | 8.17 (28.2%) | |
| May 31 | 40.00 | 0.11 | 12 | 0.9 | 11.17 (38.6%) | |
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| Top 10 Open Interest For Jun 21 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPY dividend | 6. | FXI dividend | 1. | BCRX dividend | |
| 2. | SPX dividend | 7. | BAC dividend | 2. | LB dividend | |
| 3. | EEM dividend | 8. | AAPL dividend | 3. | CARA dividend | |
| 4. | QQQ dividend | 9. | XLF dividend | 4. | NIO dividend | |
| 5. | EWZ dividend | 10. | VXX dividend | 5. | AMD dividend | |
Want more examples? VXUS Dividend | VXXB Dividend
