GDS Dividend Type Payments
Although GDS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on GDS Holdings Limited - American Depositary Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):
| GDS Holdings Limited - American Depositary Shares (GDS) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 26.98 |
27.46 |
27.25 |
+0.03 |
947K |
- |
0.0B |
GDS Dividend-Like Income Using Covered Calls
With GDS at 27.25, 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% |
0.82 |
0.2 |
| 5% |
1.36 |
0.4 |
| 10% |
2.73 |
0.7 |
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 GDS Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
28.00 |
2.50 |
59 |
4.2 |
0.54 (2.0%) |
| Oct 17 |
28.00 |
4.00 |
122 |
3.3 |
0.54 (2.0%) |
| 5% Yield On GDS Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
28.00 |
2.50 |
59 |
4.2 |
0.54 (2.0%) |
| Oct 17 |
28.00 |
4.00 |
122 |
3.3 |
0.54 (2.0%) |
| 10% Yield On GDS Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
28.00 |
2.50 |
59 |
4.2 |
0.54 (2.0%) |
| Oct 17 |
28.00 |
4.00 |
122 |
3.3 |
0.54 (2.0%) |
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