NIO Dividend Type Payments
Although NIO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on NIO Inc. American depositary shares, each representing one Class A ordi 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):
| NIO Inc. American depositary shares, each representing one Class A ordi (NIO) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 5.10 |
5.11 |
5.10 |
+0.19 |
47.6M |
- |
5.5B |
NIO Dividend-Like Income Using Covered Calls
With NIO at 5.10, 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% |
0.15 |
0.0 |
| 5% |
0.26 |
0.1 |
| 10% |
0.51 |
0.1 |
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 NIO Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 2 |
5.50 |
0.03 |
8 |
0.4 |
0.39 (7.6%) |
| Jan 9 |
5.50 |
0.07 |
15 |
0.5 |
0.39 (7.6%) |
| 5% Yield On NIO Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 2 |
5.50 |
0.03 |
8 |
0.4 |
0.39 (7.6%) |
| Jan 9 |
5.50 |
0.07 |
15 |
0.5 |
0.39 (7.6%) |
| 10% Yield On NIO Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 2 |
5.50 |
0.03 |
8 |
0.4 |
0.39 (7.6%) |
| Jan 9 |
5.50 |
0.07 |
15 |
0.5 |
0.39 (7.6%) |
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