UCO Dividend Type Payments
Although UCO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ProShares Ultra Bloomberg Crude Oil to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 10:35 AM ET):
| ProShares Ultra Bloomberg Crude Oil (UCO) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 30.77 | 30.78 | 30.78 | +0.51 | 523K | - | 1.1B |
UCO Dividend-Like Income Using Covered Calls
With UCO at 30.78, 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% | 0.92 | 0.3 |
| 5% | 1.54 | 0.4 |
| 10% | 3.08 | 0.8 |
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 UCO Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Feb 7 | 31.00 | 1.35 | 24 | 5.6 | 0.22 (0.7%) | |
| Feb 14 | 31.00 | 1.35 | 31 | 4.4 | 0.22 (0.7%) | |
| 5% Yield On UCO Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Feb 7 | 31.00 | 1.35 | 24 | 5.6 | 0.22 (0.7%) | |
| Feb 14 | 31.00 | 1.35 | 31 | 4.4 | 0.22 (0.7%) | |
| 10% Yield On UCO Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Feb 7 | 31.00 | 1.35 | 24 | 5.6 | 0.22 (0.7%) | |
| Feb 14 | 31.00 | 1.35 | 31 | 4.4 | 0.22 (0.7%) | |
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| Top 10 Open Interest For Jan 17 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | TSLA dividend | 1. | DNA dividend | |
| 2. | SLV dividend | 7. | INTC dividend | 2. | CRNC dividend | |
| 3. | AAPL dividend | 8. | XLF dividend | 3. | IOVA dividend | |
| 4. | SPY dividend | 9. | TLT dividend | 4. | RGTI dividend | |
| 5. | EEM dividend | 10. | IWM dividend | 5. | PL dividend | |
Want more examples? UCIB Dividend | UCON Dividend
