SPXU Dividend Type Payments
Although SPXU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ProShares UltraPro Short S&P500 to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):
| ProShares UltraPro Short S&P500 (SPXU) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 16.58 |
16.59 |
16.55 |
+0.22 |
25.4M |
- |
0.3B |
SPXU Dividend-Like Income Using Covered Calls
With SPXU at 16.55, 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% |
0.50 |
0.1 |
| 5% |
0.83 |
0.2 |
| 10% |
1.66 |
0.5 |
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 SPXU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
17.00 |
0.40 |
18 |
2.2 |
0.41 (2.5%) |
| Aug 8 |
17.00 |
0.55 |
25 |
2.2 |
0.41 (2.5%) |
| 5% Yield On SPXU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
17.00 |
0.40 |
18 |
2.2 |
0.41 (2.5%) |
| Aug 8 |
17.00 |
0.55 |
25 |
2.2 |
0.41 (2.5%) |
| 10% Yield On SPXU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
17.00 |
0.40 |
18 |
2.2 |
0.41 (2.5%) |
| Aug 8 |
17.00 |
0.55 |
25 |
2.2 |
0.41 (2.5%) |
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