XME Dividend Type Payments
Although XME has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on State Street 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):
| State Street SPDR S&P Metals & Mining ETF (XME) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 118.37 |
119.86 |
118.72 |
-8.05 |
6.7M |
- |
1.9B |
XME Dividend-Like Income Using Covered Calls
With XME at 118.72, 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% |
3.56 |
1.0 |
| 5% |
5.94 |
1.6 |
| 10% |
11.87 |
3.3 |
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 |
| Jun 18 |
120.00 |
10.00 |
140 |
7.1 |
0.14 (0.1%) |
| Sep 18 |
120.00 |
13.10 |
232 |
5.6 |
0.14 (0.1%) |
| 5% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jun 18 |
120.00 |
10.00 |
140 |
7.1 |
0.14 (0.1%) |
| Sep 18 |
120.00 |
13.10 |
232 |
5.6 |
0.14 (0.1%) |
| 10% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jun 18 |
120.00 |
10.00 |
140 |
7.1 |
0.14 (0.1%) |
| Sep 18 |
120.00 |
13.10 |
232 |
5.6 |
0.14 (0.1%) |
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