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 Mon 4:16 PM ET):
| State Street SPDR S&P Metals & Mining ETF (XME) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 94.30 |
95.10 |
94.73 |
-1.86 |
3.1M |
- |
1.4B |
XME Dividend-Like Income Using Covered Calls
With XME at 94.73, 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% |
2.84 |
0.8 |
| 5% |
4.74 |
1.3 |
| 10% |
9.47 |
2.6 |
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 |
| Dec 19 |
100.00 |
0.55 |
47 |
1.2 |
4.90 (5.2%) |
| Nov 21 |
95.00 |
0.95 |
19 |
4.5 |
0.00 (0.0%) |
| 5% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
95.00 |
4.10 |
47 |
8.5 |
0.00 (0.0%) |
| Nov 21 |
95.00 |
0.95 |
19 |
4.5 |
0.00 (0.0%) |
| 10% Yield On XME Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
95.00 |
4.10 |
47 |
8.5 |
0.00 (0.0%) |
| Nov 21 |
95.00 |
0.95 |
19 |
4.5 |
0.00 (0.0%) |
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