You take the $1,000,000 in the IRA and sell 60 September 2016 $SPY call contracts at Friday’s closing bid price of 33.55, simultaneously buying 6,000 shares of the $SPY ETF at Friday’s closing ask price of 192.59. If the S&P remains above 1650 at expiration, the calls will be executed, your shares will be sold away, and your one-year return will be 6.05%, or $60,500. That includes $SPY’s ~$4.00 annual dividend...
Or here's how I see it, ignoring transaction costs.
Start with $1M. Sell 6000 calls (60 contracts) at $33.55 = $201,300. You now have $1,201,300.
Buy 6000 SPYs at $192.59 = $1,155,540, leaving you with $45,760 cash.
The S&P most likely stays above 1677.5, which corresponds to SPY at 165. Your calls get exercised.
You get 6000 x $165 = $990,000, plus the $45,760 cash, plus the dividend $4.03 x 6000 = $24,180, for a total of $1,059,940.
That's a 6% return over the original $1M.
PS. Because this is a deep-in-the-money call, it may be assigned early. Then, you do not get the dividend, and only get as little as $990,000+$45,760 = $1,035,760. But then, it's 3.5% return over a time period shorter than 1 year.