SPYD Dividend Type Payments
Although SPYD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Series Trust SPDR Portfolio S&P 500 High 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):
| SPDR Series Trust SPDR Portfolio S&P 500 High Dividend ETF (SPYD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 44.95 |
45.15 |
45.09 |
+0.51 |
831K |
- |
0.0B |
SPYD Dividend-Like Income Using Covered Calls
With SPYD at 45.09, 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% |
1.35 |
0.4 |
| 5% |
2.25 |
0.6 |
| 10% |
4.51 |
1.2 |
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 SPYD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
46.00 |
0.20 |
49 |
0.4 |
0.85 (1.9%) |
| Sep 19 |
45.00 |
1.65 |
204 |
0.7 |
0.00 (0.0%) |
| 5% Yield On SPYD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
45.00 |
1.65 |
204 |
0.7 |
0.00 (0.0%) |
| Jun 20 |
45.00 |
1.25 |
113 |
1.0 |
0.00 (0.0%) |
| 10% Yield On SPYD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Mar 21 |
45.00 |
0.55 |
22 |
1.8 |
0.00 (0.0%) |
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