XOP Dividend Type Payments
Although XOP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Oil & Gas Explor & Product to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 2:10 PM ET):
| SPDR S&P Oil & Gas Explor & Product (XOP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 123.28 |
123.32 |
123.31 |
+0.76 |
2.2M |
- |
0.4B |
XOP Dividend-Like Income Using Covered Calls
With XOP at 123.31, 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% |
3.70 |
1.0 |
| 5% |
6.17 |
1.7 |
| 10% |
12.33 |
3.4 |
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 XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 5 |
123.00 |
4.00 |
29 |
12.7 |
0.00 (0.0%) |
| Sep 12 |
123.00 |
4.45 |
36 |
11.5 |
0.00 (0.0%) |
| 5% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 5 |
123.00 |
4.00 |
29 |
12.7 |
0.00 (0.0%) |
| Sep 12 |
123.00 |
4.45 |
36 |
11.5 |
0.00 (0.0%) |
| 10% Yield On XOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 5 |
123.00 |
4.00 |
29 |
12.7 |
0.00 (0.0%) |
| Sep 12 |
123.00 |
4.45 |
36 |
11.5 |
0.00 (0.0%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
