QQEW Dividend Type Payments
Although QQEW has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on First Trust Nasdaq-100 Select Equal Weight ETF 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):
| First Trust Nasdaq-100 Select Equal Weight ETF (QQEW) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 140.44 |
141.76 |
140.82 |
-0.28 |
64K |
- |
2.1B |
QQEW Dividend-Like Income Using Covered Calls
With QQEW at 140.82, 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% |
4.22 |
1.2 |
| 5% |
7.04 |
1.9 |
| 10% |
14.08 |
3.9 |
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 QQEW Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
142.00 |
1.30 |
92 |
1.4 |
0.24 (0.2%) |
| Jul 17 |
142.00 |
4.00 |
183 |
2.2 |
0.24 (0.2%) |
| 5% Yield On QQEW Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 17 |
142.00 |
4.00 |
183 |
2.2 |
0.24 (0.2%) |
| Feb 20 |
142.00 |
1.70 |
36 |
4.7 |
0.24 (0.2%) |
| 10% Yield On QQEW Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 20 |
142.00 |
1.70 |
36 |
4.7 |
0.24 (0.2%) |
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