FXN Dividend Type Payments
Although FXN has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on First Trust Energy AlphaDEX Fund to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):
| First Trust Energy AlphaDEX Fund (FXN) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 17.06 | 17.47 | 17.26 | -0.14 | 615K | - | 1.8B |
FXN Dividend-Like Income Using Covered Calls
With FXN at 17.26, 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% | 0.52 | 0.1 |
| 5% | 0.86 | 0.2 |
| 10% | 1.73 | 0.5 |
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:
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| Top 10 Open Interest For Nov 15 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | FXI dividend | 6. | IWM dividend | 1. | ZI dividend | |
| 2. | NVDA dividend | 7. | EEM dividend | 2. | GRPN dividend | |
| 3. | SPY dividend | 8. | TLT dividend | 3. | PRMW dividend | |
| 4. | SLV dividend | 9. | EWZ dividend | 4. | RKT dividend | |
| 5. | TSLA dividend | 10. | SMCI dividend | 5. | CART dividend | |
Want more examples? FXL Dividend | FXO Dividend
