FDRR Dividend Type Payments
Although FDRR has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Fidelity Dividend ETF for Rising Rates to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 1:45 PM ET):
| Fidelity Dividend ETF for Rising Rates (FDRR) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 48.03 | 48.25 | 48.04 | -0.32 | 17K | - | 0.0B |
FDRR Dividend-Like Income Using Covered Calls
With FDRR at 48.04, 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% | 1.44 | 0.4 |
| 5% | 2.40 | 0.7 |
| 10% | 4.80 | 1.3 |
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 FDRR Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 15 | 49.00 | 0.50 | 110 | 0.5 | 0.75 (1.6%) | |
| Nov 21 | 49.00 | 1.20 | 208 | 0.6 | 0.75 (1.6%) | |
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| Top 10 Open Interest For May 16 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | GLD dividend | 1. | ZETA dividend | |
| 2. | SPY dividend | 7. | IWM dividend | 2. | RDDT dividend | |
| 3. | TLT dividend | 8. | FXI dividend | 3. | SNAP dividend | |
| 4. | SLV dividend | 9. | TSLA dividend | 4. | APLD dividend | |
| 5. | QQQ dividend | 10. | IBIT dividend | 5. | IONQ dividend | |
Want more examples? FDP Dividend | FDS Dividend
