Tuesday, March 6, 2012

Do It To Me: The Hummingbird Stragety

I don't feel old. I don't feel anything until noon. Then it's time for my nap.
-- Bob Hope

The thing I like about DITM is that it is neither Day Trading (which is very difficult to do consistently with profits), and BYE and Hold (See First Solar, which went from $320 to $20 in four years).
The Hummingbird chooses the prime flower, drains it, and moves on. So was it with TAL, which I only held for a little more than 3 months, since the April call was assigned just before ex-Dividend today. Two reasons for early assignment: imminent ex-D, and a stock run up - both of which happened to TAL. Bought at the end of November for $5163 (200 sh. incl. commission), I got one 8% dividend ($104) call sold, ($798) and early callaway of stock for $4491. Total for just over 3 months: $230, or 13.36% annualized.
Some of us have discussed VALE, which has a semi-annual dividend going ex on April 16. Rather than buying it, thanks to a market/stock selloff today I was able to sell an April ATM put, then hopefully do a buy/write next month!

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