KRE Dividend Type Payments
Although KRE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Regional Banking ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
| SPDR S&P Regional Banking ETF (KRE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 65.79 |
65.84 |
65.83 |
-0.36 |
9.9M |
- |
4.1B |
KRE Dividend-Like Income Using Covered Calls
With KRE at 65.83, 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% |
3.29 |
0.9 |
| 10% |
6.58 |
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 KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 6 |
66.00 |
1.00 |
23 |
4.3 |
0.16 (0.2%) |
| Dec 13 |
66.00 |
1.00 |
30 |
3.3 |
0.16 (0.2%) |
| 5% Yield On KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 6 |
66.00 |
1.00 |
23 |
4.3 |
0.16 (0.2%) |
| Dec 13 |
66.00 |
1.00 |
30 |
3.3 |
0.16 (0.2%) |
| 10% Yield On KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 6 |
66.00 |
1.00 |
23 |
4.3 |
0.16 (0.2%) |
| Dec 13 |
66.00 |
1.00 |
30 |
3.3 |
0.16 (0.2%) |
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