SPY Dividend Type Payments

SPDR S&P 500 dividend

Although SPY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P 500 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):

SPDR S&P 500 (SPY)
Bid Ask Last Change Volume P/E Market Cap
624.16 624.17 624.06 +3.72 61.6M 91 654B

SPY Dividend-Like Income Using Covered Calls

With SPY at 624.06, 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% 18.72 5.1
5% 31.20 8.5
10% 62.41 17.1

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 SPY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 1 622.00 10.74 24 35.7 0.00 (0.0%)
Aug 8 622.00 12.32 31 32.7 0.00 (0.0%)
5% Yield On SPY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 1 622.00 10.74 24 35.7 0.00 (0.0%)
Aug 8 622.00 12.32 31 32.7 0.00 (0.0%)
10% Yield On SPY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 1 622.00 10.74 24 35.7 0.00 (0.0%)
Aug 8 622.00 12.32 31 32.7 0.00 (0.0%)

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