XME Dividend Type Payments
Although XME has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Metals & Mining ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):
| SPDR S&P Metals & Mining ETF (XME) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 88.61 |
89.15 |
89.09 |
+3.52 |
3.7M |
- |
1.3B |
XME Dividend-Like Income Using Covered Calls
With XME at 89.09, 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% |
2.67 |
0.7 |
| 5% |
4.45 |
1.2 |
| 10% |
8.91 |
2.4 |
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 XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 17 |
89.00 |
2.35 |
33 |
6.7 |
0.00 (0.0%) |
| Dec 19 |
90.00 |
3.80 |
96 |
4.0 |
0.85 (1.0%) |
| 5% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 17 |
89.00 |
2.35 |
33 |
6.7 |
0.00 (0.0%) |
| Dec 19 |
90.00 |
3.80 |
96 |
4.0 |
0.85 (1.0%) |
| 10% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 17 |
89.00 |
2.35 |
33 |
6.7 |
0.00 (0.0%) |
| Dec 19 |
90.00 |
3.80 |
96 |
4.0 |
0.85 (1.0%) |
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