XAR Dividend Type Payments

Although XAR has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Aerospace & Defense ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

SPDR S&P Aerospace & Defense ETF (XAR)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
161.21	166.91	164.10	+2.31	156K	-	0.2B

XAR Dividend-Like Income Using Covered Calls

With XAR at 164.10, 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%	4.92	1.3
5%	8.21	2.2
10%	16.41	4.5

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 XAR Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 17	167.00	2.35	32	7.3	0.09 (0.1%)
Oct 17	167.00	6.10	215	2.8	0.09 (0.1%)

5% Yield On XAR Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 17	167.00	2.35	32	7.3	0.09 (0.1%)
Oct 17	167.00	6.10	215	2.8	0.09 (0.1%)

10% Yield On XAR Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 17	167.00	2.35	32	7.3	0.09 (0.1%)
Jul 18	167.00	6.10	124	4.9	0.09 (0.1%)

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Want more examples? XAIR Dividend | XBI Dividend