KRE Dividend Type Payments
Although KRE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Regional Banking ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| SPDR S&P Regional Banking ETF (KRE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 65.90 |
65.98 |
65.84 |
+0.01 |
13.3M |
- |
4.1B |
KRE Dividend-Like Income Using Covered Calls
With KRE at 65.84, 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% |
1.98 |
0.5 |
| 5% |
3.29 |
0.9 |
| 10% |
6.58 |
1.8 |
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 KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 6 |
66.00 |
0.36 |
22 |
1.6 |
0.02 (0.0%) |
| Dec 13 |
66.00 |
0.43 |
29 |
1.5 |
0.02 (0.0%) |
| 5% Yield On KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 6 |
66.00 |
0.36 |
22 |
1.6 |
0.02 (0.0%) |
| Dec 13 |
66.00 |
0.43 |
29 |
1.5 |
0.02 (0.0%) |
| 10% Yield On KRE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
67.00 |
2.03 |
36 |
5.6 |
1.02 (1.5%) |
| Nov 22 |
66.00 |
0.19 |
8 |
2.4 |
0.02 (0.0%) |
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