ARCH Dividend Type Payments
Although ARCH has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Arch Resources, Inc. Class A to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):
| Arch Resources, Inc. Class A (ARCH) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 156.10 |
179.90 |
167.52 |
+1.25 |
228K |
17 |
3.0B |
ARCH Dividend-Like Income Using Covered Calls
With ARCH at 167.52, 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% |
5.03 |
1.4 |
| 5% |
8.38 |
2.3 |
| 10% |
16.75 |
4.6 |
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 ARCH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
180.00 |
1.95 |
32 |
6.1 |
0.10 (0.1%) |
| May 16 |
180.00 |
10.00 |
179 |
5.6 |
0.10 (0.1%) |
| 5% Yield On ARCH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
180.00 |
1.95 |
32 |
6.1 |
0.10 (0.1%) |
| May 16 |
180.00 |
10.00 |
179 |
5.6 |
0.10 (0.1%) |
| 10% Yield On ARCH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
180.00 |
1.95 |
32 |
6.1 |
0.10 (0.1%) |
| May 16 |
180.00 |
10.00 |
179 |
5.6 |
0.10 (0.1%) |
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