XBI Dividend Type Payments

Although XBI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Biotech to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 12:15 PM ET):

SPDR S&P Biotech (XBI)
Bid Ask Last Change Volume P/E Market Cap
84.30 84.32 84.31 -0.99 2.6M - 0.0B

XBI Dividend-Like Income Using Covered Calls

With XBI at 84.31, 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% 2.53 0.7
5% 4.22 1.2
10% 8.43 2.3

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 XBI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 1 88.00 0.13 9 1.4 3.68 (4.4%)
Mar 8 89.00 0.23 16 1.4 4.68 (5.6%)
5% Yield On XBI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 1 88.00 0.13 9 1.4 3.68 (4.4%)
Mar 8 89.00 0.23 16 1.4 4.68 (5.6%)
10% Yield On XBI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 1 87.50 0.21 9 2.3 3.18 (3.8%)
Mar 8 88.00 0.41 16 2.6 3.68 (4.4%)

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Top 10 Open Interest For Mar 15 Expiration     Top 5 High Yield
1.SPX dividend 6.EWZ dividend   1.ROKU dividend
2.EEM dividend 7.GE dividend   2.OLED dividend
3.SPY dividend 8.LLY dividend   3.FSLR dividend
4.QQQ dividend 9.BAC dividend   4.IQ dividend
5.FXI dividend 10.GLD dividend   5.CZR dividend

Want more examples? XAR Dividend | XBIT Dividend