CME Dividend
Although CME has a dividend of 1.25 with an ex-dividend date of Jun 9, you can sell covered calls on CME Group Inc. - Class A 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):
| CME Group Inc. - Class A (CME) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 280.82 | 287.98 | 284.07 | +2.07 | 2.0M | 28 | 102B |
CME Dividend-Like Income Using Covered Calls
With CME at 284.07, 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% | 8.52 | 2.3 |
| 5% | 14.20 | 3.9 |
| 10% | 28.41 | 7.8 |
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 CME Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 15 | 290.00 | 9.20 | 85 | 10.8 | 2.02 (0.7%) | |
| Jul 18 | 290.00 | 6.00 | 57 | 10.5 | 2.02 (0.7%) | |
| 5% Yield On CME Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 15 | 290.00 | 9.20 | 85 | 10.8 | 2.02 (0.7%) | |
| Jul 18 | 290.00 | 6.00 | 57 | 10.5 | 2.02 (0.7%) | |
| 10% Yield On CME Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 15 | 290.00 | 9.20 | 85 | 10.8 | 2.02 (0.7%) | |
| Jul 18 | 290.00 | 6.00 | 57 | 10.5 | 2.02 (0.7%) | |
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| Top 10 Open Interest For Jun 20 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | IWM dividend | 1. | QBTS dividend | |
| 2. | SPY dividend | 7. | EEM dividend | 2. | APLD dividend | |
| 3. | SLV dividend | 8. | FXI dividend | 3. | QUBT dividend | |
| 4. | QQQ dividend | 9. | TSLA dividend | 4. | CAPR dividend | |
| 5. | GLD dividend | 10. | TLT dividend | 5. | RDW dividend | |
Want more examples? CMDY Dividend | CMF Dividend
