RSP Dividend Type Payments
Although RSP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco S&P 500 Equal Weight ETF 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):
| Invesco S&P 500 Equal Weight ETF (RSP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 180.80 |
181.28 |
180.94 |
-1.30 |
5.4M |
- |
14B |
RSP Dividend-Like Income Using Covered Calls
With RSP at 180.94, 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% |
5.43 |
1.5 |
| 5% |
9.05 |
2.5 |
| 10% |
18.09 |
5.0 |
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 RSP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 6 |
181.00 |
1.60 |
22 |
6.0 |
0.00 (0.0%) |
| Dec 20 |
181.00 |
1.10 |
36 |
2.3 |
0.00 (0.0%) |
| 5% Yield On RSP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 6 |
181.00 |
1.60 |
22 |
6.0 |
0.00 (0.0%) |
| Jan 17 |
181.00 |
2.00 |
64 |
2.7 |
0.00 (0.0%) |
| 10% Yield On RSP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 6 |
181.00 |
1.60 |
22 |
6.0 |
0.00 (0.0%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
