XAR Dividend Type Payments

SPDR S&P Aerospace & Defense ETF dividend

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 Wed 10:00 AM ET):

SPDR S&P Aerospace & Defense ETF (XAR)
Bid Ask Last Change Volume P/E Market Cap
250.00 250.30 249.93 +3.83 22K - 0.2B

XAR Dividend-Like Income Using Covered Calls

With XAR at 249.93, 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% 7.50 2.1
5% 12.50 3.4
10% 24.99 6.8

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
Dec 19 250.00 4.60 66 6.5 0.00 (0.0%)
Nov 21 250.00 2.35 38 5.4 0.00 (0.0%)
5% Yield On XAR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 250.00 4.60 66 6.5 0.00 (0.0%)
Nov 21 250.00 2.35 38 5.4 0.00 (0.0%)
10% Yield On XAR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 250.00 9.00 94 9.3 0.00 (0.0%)

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