DRIP Dividend Type Payments
Although DRIP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 2X Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):
| Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 2X Shares (DRIP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 11.16 |
11.23 |
11.18 |
-0.47 |
1.3M |
- |
0.1B |
DRIP Dividend-Like Income Using Covered Calls
With DRIP at 11.18, 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% |
0.34 |
0.1 |
| 5% |
0.56 |
0.2 |
| 10% |
1.12 |
0.3 |
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 DRIP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
12.00 |
0.35 |
32 |
1.1 |
0.77 (6.9%) |
| Sep 19 |
12.00 |
1.35 |
187 |
0.7 |
0.77 (6.9%) |
| 5% Yield On DRIP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
12.00 |
0.35 |
32 |
1.1 |
0.77 (6.9%) |
| Sep 19 |
12.00 |
1.35 |
187 |
0.7 |
0.77 (6.9%) |
| 10% Yield On DRIP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
12.00 |
0.35 |
32 |
1.1 |
0.77 (6.9%) |
| Sep 19 |
12.00 |
1.35 |
187 |
0.7 |
0.77 (6.9%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
