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 Fri 4:16 PM ET):
| ProShares UltraPro Short S&P500 (SPXU) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 21.34 |
21.35 |
21.32 |
-0.61 |
9.9M |
- |
0.4B |
SPXU Dividend-Like Income Using Covered Calls
With SPXU at 21.32, 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% |
0.64 |
0.2 |
| 5% |
1.07 |
0.3 |
| 10% |
2.13 |
0.6 |
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 |
| Feb 7 |
21.50 |
0.44 |
22 |
2.0 |
0.15 (0.7%) |
| Feb 14 |
21.50 |
0.82 |
29 |
2.8 |
0.15 (0.7%) |
| 5% Yield On SPXU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
21.50 |
0.44 |
22 |
2.0 |
0.15 (0.7%) |
| Feb 14 |
21.50 |
0.82 |
29 |
2.8 |
0.15 (0.7%) |
| 10% Yield On SPXU Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 7 |
21.50 |
0.44 |
22 |
2.0 |
0.15 (0.7%) |
| Feb 14 |
21.50 |
0.82 |
29 |
2.8 |
0.15 (0.7%) |
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