XPP Dividend Type Payments

PROSHARES ULTRA FTSE CHINA 50 dividend

Although XPP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PROSHARES ULTRA FTSE CHINA 50 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):

PROSHARES ULTRA FTSE CHINA 50 (XPP)
Bid Ask Last Change Volume P/E Market Cap
65.47 66.66 66.11 +0.45 6K - 0.3B

XPP Dividend-Like Income Using Covered Calls

With XPP at 66.11, 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% 1.98 0.5
5% 3.31 0.9
10% 6.61 1.8

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 XPP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 80.00 0.20 33 0.6 13.34 (20.2%)
Oct 19 82.00 0.45 61 0.7 15.34 (23.2%)
5% Yield On XPP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 77.00 0.35 33 1.1 10.34 (15.6%)
Oct 19 80.00 0.60 61 1.0 13.34 (20.2%)
10% Yield On XPP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 74.00 0.70 33 2.1 7.34 (11.1%)
Oct 19 75.00 1.30 61 2.1 8.34 (12.6%)

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