XLI Dividend Type Payments
Although XLI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR Select Sector Fund - Industrial to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
| SPDR Select Sector Fund - Industrial (XLI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 124.81 |
125.80 |
125.30 |
+0.68 |
7.8M |
- |
19B |
XLI Dividend-Like Income Using Covered Calls
With XLI at 125.30, 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% |
3.76 |
1.0 |
| 5% |
6.27 |
1.7 |
| 10% |
12.53 |
3.4 |
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 XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
126.00 |
1.15 |
16 |
7.2 |
0.20 (0.2%) |
| May 9 |
126.00 |
0.63 |
23 |
2.7 |
0.20 (0.2%) |
| 5% Yield On XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
126.00 |
1.15 |
16 |
7.2 |
0.20 (0.2%) |
| May 9 |
126.00 |
0.63 |
23 |
2.7 |
0.20 (0.2%) |
| 10% Yield On XLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 2 |
126.00 |
1.15 |
16 |
7.2 |
0.20 (0.2%) |
| May 9 |
127.00 |
1.00 |
23 |
4.3 |
1.20 (1.0%) |
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