LI Dividend Type Payments
Although LI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Li Auto Inc. - 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 Mon 3:55 PM ET):
| Li Auto Inc. - American Depositary Shares (LI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 22.53 |
22.54 |
22.54 |
+0.02 |
2.0M |
40 |
0.0B |
LI Dividend-Like Income Using Covered Calls
With LI at 22.54, 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% |
0.68 |
0.2 |
| 5% |
1.13 |
0.3 |
| 10% |
2.25 |
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 LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 7 |
22.50 |
0.89 |
19 |
4.5 |
0.00 (0.0%) |
| Nov 14 |
23.00 |
0.97 |
26 |
3.7 |
0.46 (2.0%) |
| 5% Yield On LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 7 |
22.50 |
0.89 |
19 |
4.5 |
0.00 (0.0%) |
| Nov 14 |
23.00 |
0.97 |
26 |
3.7 |
0.46 (2.0%) |
| 10% Yield On LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 7 |
22.50 |
0.89 |
19 |
4.5 |
0.00 (0.0%) |
| Nov 14 |
23.00 |
0.97 |
26 |
3.7 |
0.46 (2.0%) |
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