FCG Dividend Type Payments

First Trust Natural Gas ETF dividend

Although FCG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on First Trust Natural Gas 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):

First Trust Natural Gas ETF (FCG)
Bid Ask Last Change Volume P/E Market Cap
26.90 27.53 26.97 +0.33 555K - 0.9B

FCG Dividend-Like Income Using Covered Calls

With FCG at 26.97, 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% 0.81 0.2
5% 1.35 0.4
10% 2.70 0.7

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 FCG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 20 28.00 0.45 157 0.3 0.47 (1.7%)
Feb 21 29.00 0.10 38 0.3 1.47 (5.5%)
5% Yield On FCG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 20 30.00 0.75 157 0.5 2.47 (9.2%)
Mar 21 28.00 0.50 66 0.8 0.47 (1.7%)
10% Yield On FCG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 21 28.00 0.50 66 0.8 0.47 (1.7%)

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