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 |
| 58.14 |
58.95 |
58.65 |
-2.59 |
2.3M |
- |
0.9B |
XME Dividend-Like Income Using Covered Calls
With XME at 58.65, 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% |
1.76 |
0.5 |
| 5% |
2.93 |
0.8 |
| 10% |
5.87 |
1.6 |
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 |
| Apr 17 |
59.00 |
0.40 |
56 |
0.7 |
0.05 (0.1%) |
| Sep 19 |
59.00 |
2.50 |
211 |
1.2 |
0.05 (0.1%) |
| 5% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
59.00 |
2.50 |
211 |
1.2 |
0.05 (0.1%) |
| Jun 20 |
59.00 |
1.75 |
120 |
1.5 |
0.05 (0.1%) |
| 10% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jun 20 |
60.00 |
2.50 |
120 |
2.1 |
1.05 (1.8%) |
| Mar 21 |
60.00 |
1.15 |
29 |
4.0 |
1.05 (1.8%) |
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