MDYG Dividend Type Payments
Although MDYG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P 400 Mid Cap Growth ETF (based on S&P MidCap 400 Growth Index--s 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):
| SPDR S&P 400 Mid Cap Growth ETF (based on S&P MidCap 400 Growth Index--s (MDYG) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 77.43 |
79.52 |
78.37 |
-0.24 |
161K |
- |
0.4B |
MDYG Dividend-Like Income Using Covered Calls
With MDYG at 78.37, 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% |
2.35 |
0.6 |
| 5% |
3.92 |
1.1 |
| 10% |
7.84 |
2.1 |
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 MDYG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
80.00 |
0.60 |
22 |
2.7 |
0.48 (0.6%) |
| Sep 19 |
80.00 |
2.05 |
148 |
1.4 |
0.48 (0.6%) |
| 5% Yield On MDYG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
80.00 |
0.60 |
22 |
2.7 |
0.48 (0.6%) |
| Sep 19 |
80.00 |
2.05 |
148 |
1.4 |
0.48 (0.6%) |
| 10% Yield On MDYG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
80.00 |
0.60 |
22 |
2.7 |
0.48 (0.6%) |
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