SPXS Dividend Type Payments
Although SPXS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Direxion Daily S&P 500 Bear 3X to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 3:10 PM ET):
| Direxion Daily S&P 500 Bear 3X (SPXS) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 6.21 |
6.22 |
6.22 |
+0.02 |
71.9M |
- |
0.1B |
SPXS Dividend-Like Income Using Covered Calls
With SPXS at 6.22, 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% |
0.19 |
0.1 |
| 5% |
0.31 |
0.1 |
| 10% |
0.62 |
0.2 |
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 SPXS Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
6.50 |
0.22 |
31 |
0.7 |
0.28 (4.5%) |
| Jan 10 |
6.50 |
0.01 |
3 |
0.3 |
0.28 (4.5%) |
| 5% Yield On SPXS Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
6.50 |
0.22 |
31 |
0.7 |
0.28 (4.5%) |
| Jan 10 |
6.50 |
0.01 |
3 |
0.3 |
0.28 (4.5%) |
| 10% Yield On SPXS Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
6.50 |
0.22 |
31 |
0.7 |
0.28 (4.5%) |
| Jan 10 |
6.50 |
0.01 |
3 |
0.3 |
0.28 (4.5%) |
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