SNAP Dividend Type Payments
Although SNAP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Snap Inc. Class A 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):
| Snap Inc. Class A (SNAP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 12.50 |
12.51 |
12.47 |
+0.43 |
54.1M |
- |
20B |
SNAP Dividend-Like Income Using Covered Calls
With SNAP at 12.47, 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% |
0.37 |
0.1 |
| 5% |
0.62 |
0.2 |
| 10% |
1.25 |
0.3 |
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 SNAP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
12.50 |
1.41 |
29 |
4.8 |
0.00 (0.0%) |
| Feb 14 |
12.50 |
1.51 |
36 |
4.2 |
0.00 (0.0%) |
| 5% Yield On SNAP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
12.50 |
1.41 |
29 |
4.8 |
0.00 (0.0%) |
| Feb 14 |
12.50 |
1.51 |
36 |
4.2 |
0.00 (0.0%) |
| 10% Yield On SNAP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
12.50 |
1.41 |
29 |
4.8 |
0.00 (0.0%) |
| Feb 14 |
12.50 |
1.51 |
36 |
4.2 |
0.00 (0.0%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
