XLY Dividend Type Payments
Although XLY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Consumer Discretionary to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 3:10 PM ET):
| SPDR Select Sector Fund - Consumer Discretionary (XLY) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 198.53 |
198.54 |
198.52 |
+0.85 |
1.6M |
- |
22B |
XLY Dividend-Like Income Using Covered Calls
With XLY at 198.52, 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% |
5.96 |
1.6 |
| 5% |
9.93 |
2.7 |
| 10% |
19.85 |
5.4 |
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 XLY Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
198.00 |
3.00 |
4 |
61.5 |
0.00 (0.0%) |
| Jun 6 |
198.00 |
7.65 |
39 |
18.2 |
0.00 (0.0%) |
| 5% Yield On XLY Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
198.00 |
3.00 |
4 |
61.5 |
0.00 (0.0%) |
| Jun 6 |
198.00 |
7.65 |
39 |
18.2 |
0.00 (0.0%) |
| 10% Yield On XLY Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
198.00 |
3.00 |
4 |
61.5 |
0.00 (0.0%) |
| Jun 6 |
198.00 |
7.65 |
39 |
18.2 |
0.00 (0.0%) |
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