VXX Dividend Type Payments

iPath Series B S&P 500 VIX Short-Term Futures ETN dividend

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 Fri 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
53.31 53.52 53.46 +0.56 5.2M - 0.0B

VXX Dividend-Like Income Using Covered Calls

With VXX at 53.46, here's a table showing how big the annual "dividend" (i.e. 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% 1.60 0.4
5% 2.67 0.7
10% 5.35 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 VXX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 3 100.00 0.10 14 0.7 46.48 (86.9%)
Jul 11 53.50 1.43 22 6.4 0.00 (0.0%)
5% Yield On VXX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 3 53.50 2.12 14 15.0 0.00 (0.0%)
Jul 11 53.50 1.43 22 6.4 0.00 (0.0%)
10% Yield On VXX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 3 53.50 2.12 14 15.0 0.00 (0.0%)
Jul 11 53.50 1.43 22 6.4 0.00 (0.0%)

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