XME Dividend Type Payments
Although XME has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Metals & Mining ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| SPDR S&P Metals & Mining ETF (XME) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 96.22 |
97.02 |
96.59 |
+0.17 |
2.6M |
- |
1.4B |
XME Dividend-Like Income Using Covered Calls
With XME at 96.59, 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% |
2.90 |
0.8 |
| 5% |
4.83 |
1.3 |
| 10% |
9.66 |
2.6 |
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 XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
100.00 |
3.00 |
50 |
6.0 |
2.98 (3.1%) |
| Nov 21 |
97.00 |
1.15 |
22 |
5.1 |
0.00 (0.0%) |
| 5% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
100.00 |
3.00 |
50 |
6.0 |
2.98 (3.1%) |
| Nov 21 |
97.00 |
1.15 |
22 |
5.1 |
0.00 (0.0%) |
| 10% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
100.00 |
3.00 |
50 |
6.0 |
2.98 (3.1%) |
| Nov 21 |
97.00 |
1.15 |
22 |
5.1 |
0.00 (0.0%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
