IAI Dividend Type Payments

iShares U.S. Broker-Dealers & Securities Exchanges ETF dividend

Although IAI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares U.S. Broker-Dealers & Securities Exchanges ETF 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):

iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI)
Bid Ask Last Change Volume P/E Market Cap
149.15 155.33 151.66 -1.04 2.1M - 0.5B

IAI Dividend-Like Income Using Covered Calls

With IAI at 151.66, 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% 4.55 1.2
5% 7.58 2.1
10% 15.17 4.2

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 IAI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 155.00 1.35 53 1.9 0.00 (0.0%)
Oct 17 155.00 6.70 236 2.7 0.00 (0.0%)
5% Yield On IAI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 155.00 6.70 236 2.7 0.00 (0.0%)
Jul 18 155.00 4.40 145 2.8 0.00 (0.0%)

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