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 Equal Weighted Index Fund to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 10:55 AM ET):
| First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 126.60 |
126.73 |
127.00 |
-1.18 |
22K |
- |
2.2B |
QQEW Dividend-Like Income Using Covered Calls
With QQEW at 127.00, 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% |
3.81 |
1.0 |
| 5% |
6.35 |
1.7 |
| 10% |
12.70 |
3.5 |
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 |
127.00 |
2.85 |
43 |
6.6 |
0.27 (0.2%) |
| Oct 17 |
127.00 |
6.10 |
226 |
2.7 |
0.27 (0.2%) |
| 5% Yield On QQEW Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
127.00 |
2.85 |
43 |
6.6 |
0.27 (0.2%) |
| Oct 17 |
127.00 |
6.10 |
226 |
2.7 |
0.27 (0.2%) |
| 10% Yield On QQEW Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
127.00 |
2.85 |
43 |
6.6 |
0.27 (0.2%) |
| Mar 21 |
127.00 |
0.90 |
16 |
5.6 |
0.27 (0.2%) |
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