SDY Dividend Type Payments

Although SDY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on State Street SPDR S&P Dividend 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):

State Street SPDR S&P Dividend ETF (SDY)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
136.29	138.27	137.23	+1.15	309K	-	23B

SDY Dividend-Like Income Using Covered Calls

With SDY at 137.23, 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%	4.12	1.1
5%	6.86	1.9
10%	13.72	3.8

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 SDY Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Dec 19	138.00	1.00	43	1.7	0.00 (0.0%)
Jan 16	138.00	1.35	71	1.5	0.00 (0.0%)

5% Yield On SDY Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Dec 19	139.00	0.90	43	2.1	0.73 (0.5%)
Apr 17	138.00	3.60	162	2.1	0.00 (0.0%)

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Want more examples? SDS Dividend | SE Dividend