TBF Dividend Type Payments
Although TBF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ProShares Short 20+ Year Treasury 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 Short 20+ Year Treasury (TBF) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 25.08 |
25.12 |
25.05 |
+0.29 |
65K |
- |
0.2B |
TBF Dividend-Like Income Using Covered Calls
With TBF at 25.05, 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% |
0.75 |
0.2 |
| 5% |
1.25 |
0.3 |
| 10% |
2.51 |
0.7 |
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 TBF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 18 |
25.00 |
0.45 |
43 |
0.8 |
0.00 (0.0%) |
| Sep 19 |
25.00 |
0.85 |
106 |
0.7 |
0.00 (0.0%) |
| 5% Yield On TBF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 18 |
25.00 |
0.45 |
43 |
0.8 |
0.00 (0.0%) |
| Sep 19 |
25.00 |
0.85 |
106 |
0.7 |
0.00 (0.0%) |
| 10% Yield On TBF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 18 |
25.00 |
0.45 |
43 |
0.8 |
0.00 (0.0%) |
| Sep 19 |
25.00 |
0.85 |
106 |
0.7 |
0.00 (0.0%) |
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