XME Dividend Type Payments
Although XME has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Metals & Mining ETF 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):
| SPDR S&P Metals & Mining ETF (XME) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 72.67 |
73.57 |
73.13 |
+0.99 |
2.2M |
- |
1.1B |
XME Dividend-Like Income Using Covered Calls
With XME at 73.13, 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% |
2.19 |
0.6 |
| 5% |
3.66 |
1.0 |
| 10% |
7.31 |
2.0 |
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 XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
74.00 |
0.50 |
71 |
0.7 |
0.43 (0.6%) |
| Dec 19 |
74.00 |
3.70 |
162 |
2.3 |
0.43 (0.6%) |
| 5% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
74.00 |
3.70 |
162 |
2.3 |
0.43 (0.6%) |
| Jan 16 |
75.00 |
4.20 |
190 |
2.2 |
1.43 (2.0%) |
| 10% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
74.00 |
3.70 |
162 |
2.3 |
0.43 (0.6%) |
| Jan 16 |
75.00 |
4.20 |
190 |
2.2 |
1.43 (2.0%) |
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