SPXU Dividend Type Payments
Although SPXU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ProShares UltraPro Short S&P500 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 3:00 PM ET):
| ProShares UltraPro Short S&P500 (SPXU) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 21.63 |
21.64 |
21.64 |
-0.26 |
8.9M |
- |
0.4B |
SPXU Dividend-Like Income Using Covered Calls
With SPXU at 21.64, 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% |
0.65 |
0.2 |
| 5% |
1.08 |
0.3 |
| 10% |
2.16 |
0.6 |
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 SPXU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
22.00 |
0.85 |
33 |
2.6 |
0.36 (1.7%) |
| Jan 10 |
22.00 |
0.24 |
5 |
4.8 |
0.36 (1.7%) |
| 5% Yield On SPXU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
22.00 |
0.85 |
33 |
2.6 |
0.36 (1.7%) |
| Jan 10 |
22.00 |
0.24 |
5 |
4.8 |
0.36 (1.7%) |
| 10% Yield On SPXU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
22.00 |
0.85 |
33 |
2.6 |
0.36 (1.7%) |
| Jan 10 |
22.00 |
0.24 |
5 |
4.8 |
0.36 (1.7%) |
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