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 |
| 43.70 |
44.07 |
43.91 |
+0.21 |
821K |
- |
0.0B |
SPYD Dividend-Like Income Using Covered Calls
With SPYD at 43.91, 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% |
1.32 |
0.4 |
| 5% |
2.20 |
0.6 |
| 10% |
4.39 |
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 |
| Jun 20 |
44.00 |
1.40 |
155 |
0.9 |
0.00 (0.0%) |
| Feb 21 |
44.00 |
0.60 |
36 |
1.5 |
0.00 (0.0%) |
| 5% Yield On SPYD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jun 20 |
44.00 |
1.40 |
155 |
0.9 |
0.00 (0.0%) |
| Feb 21 |
44.00 |
0.60 |
36 |
1.5 |
0.00 (0.0%) |
| 10% Yield On SPYD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 21 |
44.00 |
0.60 |
36 |
1.5 |
0.00 (0.0%) |
| Mar 21 |
44.00 |
0.90 |
64 |
1.3 |
0.00 (0.0%) |
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