KBE Dividend Type Payments
Although KBE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Bank ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 10:25 AM ET):
| SPDR S&P Bank ETF (KBE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 47.93 |
47.94 |
47.95 |
+0.53 |
278K |
- |
3.8B |
KBE Dividend-Like Income Using Covered Calls
With KBE at 47.95, 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 KBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
48.00 |
3.50 |
116 |
3.0 |
0.06 (0.1%) |
| May 16 |
48.00 |
1.70 |
25 |
6.8 |
0.06 (0.1%) |
| 5% Yield On KBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
48.00 |
3.50 |
116 |
3.0 |
0.06 (0.1%) |
| May 16 |
48.00 |
1.70 |
25 |
6.8 |
0.06 (0.1%) |
| 10% Yield On KBE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
48.00 |
3.50 |
116 |
3.0 |
0.06 (0.1%) |
| May 16 |
48.00 |
1.70 |
25 |
6.8 |
0.06 (0.1%) |
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