XLF Dividend Type Payments
Although XLF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Financial to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
SPDR Select Sector Fund - Financial (XLF) |
Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
40.49 |
40.51 |
40.46 |
+0.10 |
35.5M |
- |
37B |
XLF Dividend-Like Income Using Covered Calls
With XLF at 40.46, 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% |
1.21 |
0.3 |
5% |
2.02 |
0.6 |
10% |
4.05 |
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 XLF Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Jun 7 |
40.50 |
0.15 |
37 |
0.4 |
0.00 (0.0%) |
May 10 |
40.50 |
0.30 |
9 |
3.2 |
0.00 (0.0%) |
5% Yield On XLF Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Jun 7 |
41.00 |
0.47 |
37 |
1.3 |
0.49 (1.2%) |
May 10 |
40.50 |
0.30 |
9 |
3.2 |
0.00 (0.0%) |
10% Yield On XLF Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Jun 7 |
41.00 |
0.47 |
37 |
1.3 |
0.49 (1.2%) |
May 10 |
40.50 |
0.30 |
9 |
3.2 |
0.00 (0.0%) |
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