MDYG Dividend Type Payments

Although MDYG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P 400 Mid Cap Growth ETF (based on S&P MidCap 400 Growth Index--s 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 400 Mid Cap Growth ETF (based on S&P MidCap 400 Growth Index--s (MDYG)
Bid Ask Last Change Volume P/E Market Cap
84.32 85.78 85.10 +0.98 84K - 0.4B

MDYG Dividend-Like Income Using Covered Calls

With MDYG at 85.10, 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% 2.55 0.7
5% 4.26 1.2
10% 8.51 2.3

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 MDYG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 86.00 2.25 204 1.1 0.22 (0.3%)
Jun 20 86.00 1.05 113 0.9 0.22 (0.3%)

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