LABD Dividend Type Payments
Although LABD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Direxion Daily S&P Biotech Bear 3X Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 1:15 PM ET):
| Direxion Daily S&P Biotech Bear 3X Shares (LABD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 7.40 |
7.41 |
7.41 |
+0.68 |
15.5M |
- |
0.1B |
LABD Dividend-Like Income Using Covered Calls
With LABD at 7.41, 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% |
0.22 |
0.1 |
| 5% |
0.37 |
0.1 |
| 10% |
0.74 |
0.2 |
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 LABD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
7.50 |
0.30 |
8 |
3.8 |
0.09 (1.2%) |
| Jun 20 |
8.00 |
0.60 |
162 |
0.4 |
0.59 (8.0%) |
| 5% Yield On LABD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
7.50 |
0.30 |
8 |
3.8 |
0.09 (1.2%) |
| Jun 20 |
8.00 |
0.60 |
162 |
0.4 |
0.59 (8.0%) |
| 10% Yield On LABD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
7.50 |
0.30 |
8 |
3.8 |
0.09 (1.2%) |
| Jun 20 |
8.00 |
0.60 |
162 |
0.4 |
0.59 (8.0%) |
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