PSEC Dividend

Although PSEC has a dividend of 0.05 with an ex-dividend date of Aug 27, you can sell covered calls on Prospect Capital Corporation - Closed End Fund to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

Prospect Capital Corporation - Closed End Fund (PSEC)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
2.77	2.80	2.79	-0.01	4.3M	-	1.3B

PSEC Dividend-Like Income Using Covered Calls

With PSEC at 2.79, 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%	0.08	0.0
5%	0.14	0.0
10%	0.28	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 PSEC Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 19	3.00	0.05	40	0.1	0.20 (7.2%)
Nov 21	3.00	0.05	103	0.0	0.20 (7.2%)

5% Yield On PSEC Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 19	3.00	0.05	40	0.1	0.20 (7.2%)
Nov 21	3.00	0.05	103	0.0	0.20 (7.2%)

10% Yield On PSEC Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 19	3.00	0.05	40	0.1	0.20 (7.2%)

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Want more examples? PSCH Dividend | PSEP Dividend