FXD Dividend Type Payments
Although FXD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on First Trust Cons. Discret. AlphaDEX to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 11:20 AM ET):
| First Trust Cons. Discret. AlphaDEX (FXD) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 65.63 | 65.69 | 65.66 | +0.24 | 3K | - | 0.4B |
FXD Dividend-Like Income Using Covered Calls
With FXD at 65.66, 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% | 1.97 | 0.5 |
| 5% | 3.28 | 0.9 |
| 10% | 6.57 | 1.8 |
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 FXD Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jun 20 | 66.00 | 1.55 | 179 | 0.9 | 0.31 (0.5%) | |
| Mar 21 | 66.00 | 0.70 | 88 | 0.8 | 0.31 (0.5%) | |
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| Top 10 Open Interest For Jan 17 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | XLF dividend | 1. | NMRA dividend | |
| 2. | SLV dividend | 7. | SPY dividend | 2. | RUM dividend | |
| 3. | AAPL dividend | 8. | TSLA dividend | 3. | APLD dividend | |
| 4. | EEM dividend | 9. | IWM dividend | 4. | EOSE dividend | |
| 5. | INTC dividend | 10. | TLT dividend | 5. | QBTS dividend | |
Want more examples? FXC Dividend | FXE Dividend
