QQQ Dividend Type Payments
Although QQQ has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco QQQ Trust, Series 1 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 2:55 PM ET):
| Invesco QQQ Trust, Series 1 (QQQ) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 601.34 |
601.36 |
601.35 |
-7.51 |
46.6M |
- |
221B |
QQQ Dividend-Like Income Using Covered Calls
With QQQ at 601.35, 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% |
18.04 |
4.9 |
| 5% |
30.07 |
8.2 |
| 10% |
60.14 |
16.5 |
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 QQQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
599.00 |
16.18 |
19 |
72.7 |
0.00 (0.0%) |
| Dec 12 |
600.00 |
18.27 |
26 |
65.0 |
0.00 (0.0%) |
| 5% Yield On QQQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
599.00 |
16.18 |
19 |
72.7 |
0.00 (0.0%) |
| Dec 12 |
600.00 |
18.27 |
26 |
65.0 |
0.00 (0.0%) |
| 10% Yield On QQQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
599.00 |
16.18 |
19 |
72.7 |
0.00 (0.0%) |
| Dec 12 |
600.00 |
18.27 |
26 |
65.0 |
0.00 (0.0%) |
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