Tuesday, January 24, 2012


Here are three ideas of interest to DITM (Do It To Me) readers:
In one of the family accounts I manage I did a trade earlier this month on Siemens (whose earnings came out today), which pays an Annual Dividend - one of the fine tuning ideas I discussed at the SF Options Group last Saturday-
Bot SI $96.10; STO the April 90 call for $809 (plenty of downside protection)
ex-D was Jan.20 for $404. If/when SI is called in April (3 months)net profit is $585. Dividing net by initial price of stock is 6.08%, or over 24% annualized -for a relatively safe trade; no Hope and very little Fear required.

On Bloomie yesterday an old veteran Technician, Joe Granville, predicted a gloomy 2012: DJIA would drop 1,000 points of Dark every quarter, for a total of 4,000 points, landing the Dow at 8,000 for the year. How to handle this gloomy scenario?:
If you buy the DIA and sell the call 10% lower, you could "Step Down" every quarter to each level and make 100% of your estimated profit. E.g., with the DIA at 126, sell the call $12 lower (114), then the 102 when the DIA hits 114 - then the 90, then the 78! Pretty good risk management for a doomsday scenario.

Finally, I mentioned SeekingAlpha as a good source of dividend stocks. Today's email listed the 2012 Dogs of the Dow:

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