LABU Dividend Type Payments
Although LABU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Direxion Daily S&P Biotech Bull 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 4:16 PM ET):
| Direxion Daily S&P Biotech Bull 3X Shares (LABU) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 87.15 |
87.57 |
87.44 |
-9.02 |
1.9M |
- |
0.1B |
LABU Dividend-Like Income Using Covered Calls
With LABU at 87.44, 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% |
2.62 |
0.7 |
| 5% |
4.37 |
1.2 |
| 10% |
8.74 |
2.4 |
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 LABU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
100.00 |
3.00 |
29 |
10.3 |
12.43 (14.2%) |
| Feb 14 |
100.00 |
4.85 |
36 |
13.5 |
12.43 (14.2%) |
| 5% Yield On LABU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
100.00 |
3.00 |
29 |
10.3 |
12.43 (14.2%) |
| Feb 14 |
100.00 |
4.85 |
36 |
13.5 |
12.43 (14.2%) |
| 10% Yield On LABU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
100.00 |
3.00 |
29 |
10.3 |
12.43 (14.2%) |
| Feb 14 |
100.00 |
4.85 |
36 |
13.5 |
12.43 (14.2%) |
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