XRT Dividend Type Payments
Although XRT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Retail 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 Retail ETF (XRT) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 77.84 |
78.99 |
78.59 |
-0.85 |
4.1M |
- |
1.3B |
XRT Dividend-Like Income Using Covered Calls
With XRT at 78.59, 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% |
2.36 |
0.6 |
| 5% |
3.93 |
1.1 |
| 10% |
7.86 |
2.2 |
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 XRT Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 13 |
79.00 |
0.30 |
29 |
1.0 |
0.01 (0.0%) |
| Dec 20 |
79.00 |
1.91 |
36 |
5.3 |
0.01 (0.0%) |
| 5% Yield On XRT Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
79.00 |
1.91 |
36 |
5.3 |
0.01 (0.0%) |
| Nov 22 |
79.00 |
0.62 |
8 |
7.8 |
0.01 (0.0%) |
| 10% Yield On XRT Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
79.00 |
1.91 |
36 |
5.3 |
0.01 (0.0%) |
| Nov 22 |
79.00 |
0.62 |
8 |
7.8 |
0.01 (0.0%) |
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