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 Wed 4:16 PM ET):
| SPDR S&P Semiconductor ETF (XSD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 210.56 |
217.96 |
215.54 |
+4.84 |
66K |
- |
0.9B |
XSD Dividend-Like Income Using Covered Calls
With XSD at 215.54, 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% |
6.47 |
1.8 |
| 5% |
10.78 |
3.0 |
| 10% |
21.55 |
5.9 |
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 |
| May 17 |
220.00 |
3.00 |
24 |
12.5 |
2.04 (0.9%) |
| Jun 21 |
220.00 |
8.30 |
59 |
14.1 |
2.04 (0.9%) |
| 5% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 17 |
220.00 |
3.00 |
24 |
12.5 |
2.04 (0.9%) |
| Jun 21 |
220.00 |
8.30 |
59 |
14.1 |
2.04 (0.9%) |
| 10% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 17 |
220.00 |
3.00 |
24 |
12.5 |
2.04 (0.9%) |
| Jun 21 |
220.00 |
8.30 |
59 |
14.1 |
2.04 (0.9%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
