That Means: Show Me the Money

There are three ways to measure income yield on your investment portfolio. The first (1) is the actual yield based on current balance of your portfolio. This can vary from day-to-day depending on the total value of your portfolio and the anticipated dividend income. The second (2) is yield from income already received. The third (3) is yield based on both dividend and options income. When you combine dividends and options income you boost your overall potential yield. The income from options can be viewed as a synthetic dividend.

Our current total portfolio is worth about $3.6M and Fidelity says the Estimated Annual Income (EAI) from our investments is $211,776.92. Fidelity’s number is low, because it doesn’t include monthly dividend income from our cash in the SPAXX and FDRXX money market holdings. If we include the SPAXX and FDRXX dividends, the current EAI would be $219,535. That works out to be an average monthly income of $18,294. Expressed weekly, the dividend income is $4,222 per week.

Assume, for a moment, that I worked 40-hour weeks. My hourly “pay” for passive income would be $105.55 per hour. Because I don’t work in the traditional sense, Every hour of the day we have an average income of over $100. That income continues to come even if I am mowing the lawn, changing water in one of our aquariums, taking Cindie out for lunch or dinner, or enjoying time with our family.

What is a Synthetic Dividend?

You can make money on stocks that don’t pay a dividend. I do it all the time. For example, Amazon (AMZN) does not pay a dividend. However, during 2026 I have received synthetic dividends totaling $1,163 since June 2, 2026. This was accomplished with covered call options contracts and rolling the contract six times.

“A common example of this strategy consists of selling covered call options against a portfolio of non-dividend-paying companies. In doing so, the investor would realize income from the premiums earned on the options they sell, thereby creating a ‘synthetic dividend’ out of their portfolio.” – Investopedia

Hard-Working Current Total Cash

Our current total cash is $230K. This money is working twice as hard as most investor’s cash. First of all, the SPAXX cash has a current yield of 3.30% and the FDRXX cash yields 3.38%. So, based on the current cash holdings, I can expect about $7,753 in additional dividend income from our cash. This can vary, as our cash balances change from month-to-month.

But wait, our cash is really earning more than that. The reason is simple: There is income from trading Cash Covered Put Options. These are synthetic dividends.

I currently have 26 PUT option contracts open. They are as follows: SLS260710P11.5, SMCI271217P30, VZ260710P42, CRDO260724P260, INTC260710P105, NBIS270219P170, PGY270617P13, RPD260717P10, SHLS260821P9, SMCI271217P30, SMCI271217P55,  SPCX260717P140, SMCI271217P30, and SPCX271217P115. (NOTE: Some of these are very high risk and are not suitable for every investor!) While these contracts are open, cash is being held in case I have to buy the underlying shares. That cash is continuing to earn interest.

For example, in my Traditional IRA $131,900.00 is reserved for PUT contracts. However, while the contracts move towards the contract expiration date, the $131,900.00 is earning interest. Furthermore, my total income from cash covered put options is $14,606.76. Half of that additional income comes from trading CRDO put options: $7,400. In other words, the additional synthetic dividend income from CRDO put options is almost as much as the EAI from the total dividends from our money market fund holdings.

What is a Cash Covered Put Option Contract?

When I sell a cash-secured put option two things happen. One, I receive income. This income is mine to keep. The second thing is that I incur a potential obligation to buy 100 shares of the underlying stock at the price of the shares in the put contract. So, if I agree to buy the shares at $50/share, and the current price of the shares is $55, then I may not have to buy the shares. However, on the expiration date of the contract, if the share price falls to or below $50 per share, I am obliged to purchase the shares for $5,000 That is 100 shares times $50 per share.

“A cash-secured put is an options strategy that can generate income and potentially help you buy stocks at a lower price.” – Fidelity Investments

“A cash‑secured put is easiest to understand from the put seller’s point of view. When you sell a cash‑secured put, you collect the premium upfront, and in exchange you take on the potential obligation to buy the stock at the strike price.” – Fidelity Investments

When you sell a put option do it understanding you might have to buy the shares. Therefore, it is not prudent to trade put options on stocks you would not want to own.

So What Is My Yield?

Given our total account balance, and the income ALREADY received from dividends and options trades, our true yield is 5.86%. Bear in mind that the yield will increase as more dividends are received and if I generate more synthetic dividends using options trades. In fact, it is not unreasonable to expect a yield of eight percent by the end of the year.

CRDO Company Profile

Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet and PCIe applications in the United States, Taiwan, Mainland China, Hong Kong, and other international markets. The company offers ZeroFlap (ZF) active electrical cables and ZF optical transceivers, OmniConnect memory solutions, and a suite of retimers and DSPs for optical and copper Ethernet and PCIe, as well as integrated circuits, active electrical cables, and SerDes chiplets. It also provides intellectual property (IP) solutions, including SerDes IP licensing. The company offers was founded in 2008 and is headquartered in Grand Cayman, the Cayman Islands.

Recommendation: Options For Investing Doers

Don’t buy  CRDO if you don’t want to trade options contracts or if you don’t like price volatility. It is better to avoid non-dividend investments unless you have more appetite for risk. Credo Technology Group Holding Ltd does NOT pay a dividend.

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