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 |
| 77.24 |
78.32 |
77.87 |
+0.66 |
137K |
- |
0.0B |
XSD Dividend-Like Income Using Covered Calls
With XSD at 77.87, 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% |
2.34 |
0.6 |
| 5% |
3.89 |
1.1 |
| 10% |
7.79 |
2.1 |
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 |
| Mar 15 |
80.00 |
0.40 |
24 |
1.7 |
1.68 (2.2%) |
| Apr 18 |
83.00 |
0.40 |
58 |
0.7 |
4.68 (6.0%) |
| 5% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Mar 15 |
80.00 |
0.40 |
24 |
1.7 |
1.68 (2.2%) |
| Apr 18 |
82.00 |
0.70 |
58 |
1.2 |
3.68 (4.7%) |
| 10% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Mar 15 |
79.00 |
1.00 |
24 |
4.2 |
0.68 (0.9%) |
| Apr 18 |
80.00 |
1.30 |
58 |
2.2 |
1.68 (2.2%) |
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