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 |
| 64.13 |
64.73 |
64.41 |
+0.28 |
916K |
- |
0.9B |
XME Dividend-Like Income Using Covered Calls
With XME at 64.41, 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% |
1.93 |
0.5 |
| 5% |
3.22 |
0.9 |
| 10% |
6.44 |
1.8 |
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 XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 18 |
67.00 |
0.55 |
43 |
1.3 |
2.27 (3.5%) |
| Sep 19 |
65.00 |
2.30 |
106 |
2.2 |
0.27 (0.4%) |
| 5% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 18 |
67.00 |
0.55 |
43 |
1.3 |
2.27 (3.5%) |
| Sep 19 |
65.00 |
2.30 |
106 |
2.2 |
0.27 (0.4%) |
| 10% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
65.00 |
2.30 |
106 |
2.2 |
0.27 (0.4%) |
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