XSD Dividend Type Payments
Although XSD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Semiconductor 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 Semiconductor ETF (XSD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 220.58 |
229.00 |
225.16 |
-7.56 |
35K |
- |
1.0B |
XSD Dividend-Like Income Using Covered Calls
With XSD at 225.16, 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% |
6.75 |
1.9 |
| 5% |
11.26 |
3.1 |
| 10% |
22.52 |
6.2 |
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 XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
230.00 |
6.70 |
36 |
18.6 |
1.00 (0.4%) |
| Jan 17 |
230.00 |
9.10 |
64 |
14.2 |
1.00 (0.4%) |
| 5% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
230.00 |
6.70 |
36 |
18.6 |
1.00 (0.4%) |
| Jan 17 |
230.00 |
9.10 |
64 |
14.2 |
1.00 (0.4%) |
| 10% Yield On XSD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
230.00 |
6.70 |
36 |
18.6 |
1.00 (0.4%) |
| Jan 17 |
230.00 |
9.10 |
64 |
14.2 |
1.00 (0.4%) |
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