XPH Dividend Type Payments
Although XPH has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Pharmaceuticals 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 Pharmaceuticals ETF (XPH) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 44.05 |
45.94 |
45.05 |
-1.24 |
580K |
- |
0.7B |
XPH Dividend-Like Income Using Covered Calls
With XPH at 45.05, 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% |
1.35 |
0.4 |
| 5% |
2.25 |
0.6 |
| 10% |
4.51 |
1.2 |
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 XPH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
46.00 |
1.95 |
154 |
1.3 |
0.06 (0.1%) |
| Jul 18 |
46.00 |
2.65 |
246 |
1.1 |
0.06 (0.1%) |
| 5% Yield On XPH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
46.00 |
1.95 |
154 |
1.3 |
0.06 (0.1%) |
| Jul 18 |
46.00 |
2.65 |
246 |
1.1 |
0.06 (0.1%) |
| 10% Yield On XPH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
46.00 |
1.95 |
154 |
1.3 |
0.06 (0.1%) |
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