SDS Dividend Type Payments

ProShares UltraShort S&P500 dividend

Although SDS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ProShares UltraShort S&P500 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 9:55 AM ET):

ProShares UltraShort S&P500 (SDS)
Bid Ask Last Change Volume P/E Market Cap
66.48 66.49 66.48 -0.14 409K - 0.3B

SDS Dividend-Like Income Using Covered Calls

With SDS at 66.48, 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% 1.99 0.5
5% 3.32 0.9
10% 6.65 1.8

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 SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 67.00 0.70 10 7.0 0.51 (0.8%)
Jun 18 67.00 4.00 163 2.5 0.51 (0.8%)
5% Yield On SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 67.00 0.70 10 7.0 0.51 (0.8%)
Jun 18 67.00 4.00 163 2.5 0.51 (0.8%)
10% Yield On SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 67.00 0.70 10 7.0 0.51 (0.8%)
Jun 18 67.00 4.00 163 2.5 0.51 (0.8%)

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