XRT Dividend Type Payments
Although XRT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on State Street SPDR S&P Retail ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 11:00 AM ET):
| State Street SPDR S&P Retail ETF (XRT) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 84.35 |
84.37 |
84.36 |
-0.28 |
918K |
- |
1.4B |
XRT Dividend-Like Income Using Covered Calls
With XRT at 84.36, 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% |
2.53 |
0.7 |
| 5% |
4.22 |
1.2 |
| 10% |
8.44 |
2.3 |
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 XRT Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
84.00 |
0.67 |
4 |
7.5 |
0.00 (0.0%) |
| Dec 12 |
84.00 |
1.45 |
11 |
9.8 |
0.00 (0.0%) |
| 5% Yield On XRT Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
84.00 |
0.67 |
4 |
7.5 |
0.00 (0.0%) |
| Dec 12 |
84.00 |
1.45 |
11 |
9.8 |
0.00 (0.0%) |
| 10% Yield On XRT Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
84.00 |
0.67 |
4 |
7.5 |
0.00 (0.0%) |
| Dec 12 |
84.00 |
1.45 |
11 |
9.8 |
0.00 (0.0%) |
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