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 Wed 4:16 PM ET):
| Direxion Daily 20-Yr Treasury Bull 3x Shrs (TMF) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 37.90 |
37.93 |
38.09 |
+0.11 |
11.4M |
- |
0.1B |
TMF Dividend-Like Income Using Covered Calls
With TMF at 38.09, 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% |
1.14 |
0.3 |
| 5% |
1.90 |
0.5 |
| 10% |
3.81 |
1.0 |
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 |
| Feb 7 |
38.00 |
2.15 |
31 |
6.9 |
0.07 (0.2%) |
| Jan 10 |
38.00 |
0.71 |
3 |
23.7 |
0.07 (0.2%) |
| 5% Yield On TMF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
38.00 |
2.15 |
31 |
6.9 |
0.07 (0.2%) |
| Jan 10 |
38.00 |
0.71 |
3 |
23.7 |
0.07 (0.2%) |
| 10% Yield On TMF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
38.00 |
2.15 |
31 |
6.9 |
0.07 (0.2%) |
| Jan 10 |
38.00 |
0.71 |
3 |
23.7 |
0.07 (0.2%) |
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