ITA Dividend Type Payments

Although ITA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares U.S. Aerospace & Defense ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 10:40 AM ET):

iShares U.S. Aerospace & Defense ETF (ITA)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
148.57	148.80	148.71	-1.12	62K	-	6.3B

ITA Dividend-Like Income Using Covered Calls

With ITA at 148.71, 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%	4.46	1.2
5%	7.44	2.0
10%	14.87	4.1

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 ITA Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	149.00	4.90	37	13.2	0.20 (0.1%)
Apr 17	149.00	2.40	8	30.0	0.20 (0.1%)

5% Yield On ITA Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	149.00	4.90	37	13.2	0.20 (0.1%)
Apr 17	149.00	2.40	8	30.0	0.20 (0.1%)

10% Yield On ITA Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	149.00	4.90	37	13.2	0.20 (0.1%)
Apr 17	149.00	2.40	8	30.0	0.20 (0.1%)

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Want more examples? IT Dividend | ITB Dividend