GOVT Dividend Type Payments
Although GOVT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares U.S. Treasury Bond ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 12:10 PM ET):
| iShares U.S. Treasury Bond ETF (GOVT) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 23.04 | 23.05 | 23.05 | -0.04 | 4.2M | - | 13B |
GOVT Dividend-Like Income Using Covered Calls
With GOVT at 23.05, 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% | 0.69 | 0.2 |
| 5% | 1.15 | 0.3 |
| 10% | 2.31 | 0.6 |
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 GOVT Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Nov 15 | 23.00 | 0.25 | 38 | 0.5 | 0.00 (0.0%) | |
| Oct 18 | 23.00 | 0.10 | 10 | 0.5 | 0.00 (0.0%) | |
| 5% Yield On GOVT Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Nov 15 | 23.00 | 0.25 | 38 | 0.5 | 0.00 (0.0%) | |
| Oct 18 | 23.00 | 0.10 | 10 | 0.5 | 0.00 (0.0%) | |
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| Top 10 Open Interest For Oct 18 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | EEM dividend | 1. | WOLF dividend | |
| 2. | IWM dividend | 7. | SLV dividend | 2. | FUTU dividend | |
| 3. | FXI dividend | 8. | SMCI dividend | 3. | AEHR dividend | |
| 4. | SPY dividend | 9. | TSLA dividend | 4. | BYND dividend | |
| 5. | QQQ dividend | 10. | HYG dividend | 5. | SERV dividend | |
Want more examples? GOSS Dividend | GP Dividend
