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 3:35 PM ET):
| iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 22.69 | 22.70 | 22.70 | -0.10 | 13.7M | - | 0.0B |
VXX Dividend-Like Income Using Covered Calls
With VXX at 22.70, 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% | 0.68 | 0.2 |
| 5% | 1.14 | 0.3 |
| 10% | 2.27 | 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 VXX Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jul 19 | 43.00 | 0.01 | 5 | 0.2 | 20.30 (89.4%) | |
| Jul 26 | 40.00 | 0.03 | 12 | 0.3 | 17.30 (76.2%) | |
| 5% Yield On VXX Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jul 19 | 36.00 | 0.02 | 5 | 0.4 | 13.30 (58.6%) | |
| Jul 26 | 37.00 | 0.04 | 12 | 0.3 | 14.30 (63.0%) | |
| 10% Yield On VXX Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jul 19 | 28.50 | 0.04 | 5 | 0.8 | 5.80 (25.6%) | |
| Jul 26 | 29.50 | 0.08 | 12 | 0.7 | 6.80 (30.0%) | |
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| Top 10 Open Interest For Jul 19 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPY dividend | 6. | OIH dividend | 1. | BFR dividend | |
| 2. | SPX dividend | 7. | FXI dividend | 2. | SKX dividend | |
| 3. | EEM dividend | 8. | USO dividend | 3. | OSTK dividend | |
| 4. | QQQ dividend | 9. | AAPL dividend | 4. | CRWD dividend | |
| 5. | IWM dividend | 10. | EWZ dividend | 5. | NFLX dividend | |
Want more examples? VXUS Dividend | VXXB Dividend
