Tuesday, June 12, 2012


Except for very special circumstances it probably is wise to abandon the capture of Annual Dividends with a DITM covered call. Paradoxically what rewards one for getting the whole year's dividend up front, penalizes them if the stock declines (in a bad market or bad sector- or both). So with VALE, with the call expiring this week, since I only get charged for 1 commission on a rollout, I rolled out and down to Sept. 20 from the June 22. Not counting the minor loss, the rollout nets about 18% annualized. If VALE rises to 20 I can consider letting it get called away, or rolling UP.
 I was certain that if I bailed out of CLF it would V-Spike up without me, but I was wrong even here. I intend to watch it until late July when it goes ex-D again. I am not one to be afraid to put my hand on a cold stove after burning it!
Lots of stocks going ex-D the 13th and beyond: HUN, TOT, caveat emptor!

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