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 Fri 4:16 PM ET):
| Invesco QQQ Trust, Series 1 (QQQ) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 522.05 |
522.08 |
522.29 |
-0.76 |
38.4M |
- |
190B |
QQQ Dividend-Like Income Using Covered Calls
With QQQ at 522.29, 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% |
15.67 |
4.3 |
| 5% |
26.11 |
7.2 |
| 10% |
52.23 |
14.3 |
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 |
| Feb 7 |
520.00 |
7.49 |
8 |
67.6 |
0.00 (0.0%) |
| Mar 7 |
520.00 |
14.55 |
36 |
34.6 |
0.00 (0.0%) |
| 5% Yield On QQQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
520.00 |
7.49 |
8 |
67.6 |
0.00 (0.0%) |
| Mar 7 |
520.00 |
14.55 |
36 |
34.6 |
0.00 (0.0%) |
| 10% Yield On QQQ Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
520.00 |
7.49 |
8 |
67.6 |
0.00 (0.0%) |
| Mar 7 |
520.00 |
14.55 |
36 |
34.6 |
0.00 (0.0%) |
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