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 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 (XSD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 67.82 |
68.50 |
68.08 |
-1.12 |
162K |
- |
3.2B |
XSD Dividend-Like Income Using Covered Calls
With XSD at 68.08, 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% |
2.04 |
0.6 |
| 5% |
3.40 |
0.9 |
| 10% |
6.81 |
1.9 |
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 |
| Nov 16 |
71.00 |
0.80 |
29 |
2.8 |
2.50 (3.7%) |
| Jan 18 |
74.00 |
1.05 |
92 |
1.1 |
5.50 (8.1%) |
| 5% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 16 |
71.00 |
0.80 |
29 |
2.8 |
2.50 (3.7%) |
| Jan 18 |
74.00 |
1.05 |
92 |
1.1 |
5.50 (8.1%) |
| 10% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 16 |
71.00 |
0.80 |
29 |
2.8 |
2.50 (3.7%) |
| Jan 18 |
70.00 |
2.65 |
92 |
2.9 |
1.50 (2.2%) |
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