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 Thu 4:16 PM ET):

ProShares UltraShort S&P500 (SDS)
Bid Ask Last Change Volume P/E Market Cap
18.57 18.58 18.49 -0.13 11.2M - 0.5B

SDS Dividend-Like Income Using Covered Calls

With SDS at 18.49, 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% 0.55 0.2
5% 0.92 0.3
10% 1.85 0.5

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
Sep 19 19.00 1.35 226 0.6 0.42 (2.3%)
Jun 20 19.00 0.95 135 0.7 0.42 (2.3%)
5% Yield On SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 19.00 1.35 226 0.6 0.42 (2.3%)
Jun 20 19.00 0.95 135 0.7 0.42 (2.3%)
10% Yield On SDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 19.00 1.35 226 0.6 0.42 (2.3%)
Jun 20 19.00 0.95 135 0.7 0.42 (2.3%)

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