VXX Dividend Type Payments

iPath S&P 500 VIX ST Futures E dividend

Although VXX has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iPath S&P 500 VIX ST Futures E to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):

iPath S&P 500 VIX ST Futures E (VXX)
Bid Ask Last Change Volume P/E Market Cap
39.65 39.66 39.98 -0.13 40.3M - 0.0B

VXX Dividend-Like Income Using Covered Calls

With VXX at 39.98, 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% 1.20 0.3
5% 2.00 0.5
10% 4.00 1.1

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
Dec 14 50.00 0.02 4 0.5 10.34 (25.9%)
Dec 21 55.00 0.05 11 0.5 15.34 (38.4%)
5% Yield On VXX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 47.50 0.03 4 0.8 7.84 (19.6%)
Dec 21 52.00 0.07 11 0.6 12.34 (30.9%)
10% Yield On VXX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 46.50 0.05 4 1.3 6.84 (17.1%)
Dec 21 50.00 0.14 11 1.3 10.34 (25.9%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
1.DUST dividend 6.NSSC dividend   1. dividend
2.NOVT dividend 7.MOD dividend   2. dividend
3.MMS dividend 8.VV dividend   3. dividend
4.VSI dividend 9.EC dividend   4. dividend
5.DXJS dividend 10.NTWK dividend   5. dividend

Want more examples? VXUS Dividend | VXXB Dividend