XBI Dividend Type Payments
Although XBI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Series Trust SPDR S&P Biotech 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 Series Trust SPDR S&P Biotech ETF (XBI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 88.16 |
88.24 |
88.29 |
+1.16 |
6.3M |
- |
2.2B |
XBI Dividend-Like Income Using Covered Calls
With XBI at 88.29, 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% |
2.65 |
0.7 |
| 5% |
4.41 |
1.2 |
| 10% |
8.83 |
2.4 |
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 XBI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 4 |
88.00 |
2.52 |
19 |
12.0 |
0.00 (0.0%) |
| Apr 11 |
88.00 |
2.92 |
26 |
10.3 |
0.00 (0.0%) |
| 5% Yield On XBI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 4 |
88.00 |
2.52 |
19 |
12.0 |
0.00 (0.0%) |
| Apr 11 |
88.00 |
2.92 |
26 |
10.3 |
0.00 (0.0%) |
| 10% Yield On XBI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 4 |
88.00 |
2.52 |
19 |
12.0 |
0.00 (0.0%) |
| Apr 11 |
88.00 |
2.92 |
26 |
10.3 |
0.00 (0.0%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
