OEF Dividend Type Payments

iShares S&P 100 ETF dividend

Although OEF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares S&P 100 ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):

iShares S&P 100 ETF (OEF)
Bid Ask Last Change Volume P/E Market Cap
280.86 286.91 286.27 +1.66 226K - 15B

OEF Dividend-Like Income Using Covered Calls

With OEF at 286.27, 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% 8.59 2.4
5% 14.31 3.9
10% 28.63 7.8

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 OEF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 290.00 0.80 32 2.5 3.09 (1.1%)
Jan 17 290.00 2.60 60 4.3 3.09 (1.1%)
5% Yield On OEF Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 17 290.00 2.60 60 4.3 3.09 (1.1%)
Jun 20 290.00 11.80 214 5.5 3.09 (1.1%)

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