XSD Dividend Type Payments
Although XSD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Semiconductor ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| SPDR S&P Semiconductor ETF (XSD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 66.41 |
67.34 |
66.77 |
-0.98 |
70K |
- |
0.0B |
XSD Dividend-Like Income Using Covered Calls
With XSD at 66.77, 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% |
2.00 |
0.5 |
| 5% |
3.34 |
0.9 |
| 10% |
6.68 |
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 XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 21 |
68.00 |
0.20 |
8 |
2.5 |
0.66 (1.0%) |
| Jan 18 |
73.00 |
0.30 |
36 |
0.8 |
5.66 (8.5%) |
| 5% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 21 |
68.00 |
0.20 |
8 |
2.5 |
0.66 (1.0%) |
| Jan 18 |
71.00 |
0.50 |
36 |
1.4 |
3.66 (5.5%) |
| 10% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 21 |
68.00 |
0.20 |
8 |
2.5 |
0.66 (1.0%) |
| Jan 18 |
69.00 |
0.90 |
36 |
2.5 |
1.66 (2.5%) |
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