LABU Dividend Type Payments
Although LABU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Direxion Daily S&P Biotech Bull 3X Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 11:20 AM ET):
| Direxion Daily S&P Biotech Bull 3X Shares (LABU) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 76.85 |
76.93 |
76.79 |
-0.06 |
290K |
- |
0.3B |
LABU Dividend-Like Income Using Covered Calls
With LABU at 76.79, 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% |
2.30 |
0.6 |
| 5% |
3.84 |
1.1 |
| 10% |
7.68 |
2.1 |
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 LABU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
100.00 |
0.30 |
18 |
1.7 |
23.07 (30.0%) |
| Oct 10 |
100.00 |
0.65 |
25 |
2.6 |
23.07 (30.0%) |
| 5% Yield On LABU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
100.00 |
0.30 |
18 |
1.7 |
23.07 (30.0%) |
| Oct 10 |
100.00 |
0.65 |
25 |
2.6 |
23.07 (30.0%) |
| 10% Yield On LABU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 3 |
77.00 |
4.90 |
18 |
27.2 |
0.07 (0.1%) |
| Oct 10 |
100.00 |
0.65 |
25 |
2.6 |
23.07 (30.0%) |
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