TBT Dividend Type Payments

Although TBT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ProShares UltraShort Lehman 20 Year Treasury to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):

ProShares UltraShort Lehman 20 Year Treasury (TBT)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
33.00	33.45	33.28	-0.11	545K	-	0.7B

TBT Dividend-Like Income Using Covered Calls

With TBT at 33.28, 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%	1.00	0.3
5%	1.66	0.5
10%	3.33	0.9

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 TBT Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Oct 17	34.00	0.50	32	1.6	0.55 (1.7%)
Dec 19	34.00	1.15	95	1.2	0.55 (1.7%)

5% Yield On TBT Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Oct 17	34.00	0.50	32	1.6	0.55 (1.7%)
Dec 19	34.00	1.15	95	1.2	0.55 (1.7%)

10% Yield On TBT Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Oct 17	34.00	0.50	32	1.6	0.55 (1.7%)
Dec 19	34.00	1.15	95	1.2	0.55 (1.7%)

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Want more examples? TBPH Dividend | TBX Dividend