XTN Dividend Type Payments

SPDR S&P Transportation ETF dividend

Although XTN has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPDR S&P Transportation 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 Transportation ETF (XTN)
Bid Ask Last Change Volume P/E Market Cap
83.61 87.85 84.73 -0.40 6K - 0.4B

XTN Dividend-Like Income Using Covered Calls

With XTN at 84.73, 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% 2.54 0.7
5% 4.24 1.2
10% 8.47 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 XTN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 88.00 0.65 64 1.0 0.15 (0.2%)
Jan 16 88.00 1.10 92 1.2 0.15 (0.2%)
5% Yield On XTN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 88.00 1.10 92 1.2 0.15 (0.2%)
Apr 17 88.00 2.60 183 1.4 0.15 (0.2%)

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