TMF Dividend Type Payments
Although TMF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Direxion Daily 20-Yr Treasury Bull 3x Shrs to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
| Direxion Daily 20-Yr Treasury Bull 3x Shrs (TMF) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 38.84 |
38.93 |
39.10 |
-1.09 |
8.1M |
- |
0.3B |
TMF Dividend-Like Income Using Covered Calls
With TMF at 39.10, 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% |
1.17 |
0.3 |
| 5% |
1.96 |
0.5 |
| 10% |
3.91 |
1.1 |
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 TMF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
39.00 |
1.64 |
16 |
10.3 |
0.07 (0.2%) |
| May 9 |
39.00 |
2.03 |
23 |
8.8 |
0.07 (0.2%) |
| 5% Yield On TMF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
39.00 |
1.64 |
16 |
10.3 |
0.07 (0.2%) |
| May 9 |
39.00 |
2.03 |
23 |
8.8 |
0.07 (0.2%) |
| 10% Yield On TMF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
39.00 |
1.64 |
16 |
10.3 |
0.07 (0.2%) |
| May 9 |
39.00 |
2.03 |
23 |
8.8 |
0.07 (0.2%) |
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