There has been talk in the media that many companies will be issuing special dividends before year end to avoid the possible Fiscal Cliff raising of the dividend tax. This can be good or bad, for DITM, depending on the size and nature. As we found out awhile back, sometimes it can affect the option price as well - if not, the extra dividend comes out of the part that you "pre-sold" by the ITM call!!
Also, the DIA, while not paying much, pays higher dividends in Nov., Dec. due to which stocks of the Dow 30 go ex then.
I'm looking also at JPM - A rated by Schwab, only less than 3%, but nice call premium.
For a real flyer, check out ALSK, going ex tmrow. risky (don't try with milk money) but looks oversold.
LOL
Tuesday, September 25, 2012
Monday, September 24, 2012
ANOTHER HOME RUN!:
Back from another vacation, I found three stocks (ETFs) called away - at, below, and above average returns:
Iron Mountain (IRM) was a short hold, which had a warning by Barron's, so glad to see it go - Bought last June at $6709 (with comm.), received 1 dividend $54, ITM call premium was $758, stock called at $5991 -net only $94, or 5.60% annualized at the three months return.
SDY, the dividend ETF was better at $10847 cost, $90, $778, and $10,191 returns (see above) for $212 net, or 7.82% ann.
The home run, including a sold put last Jan., was SCCO. which is better since it was 8 months term - 16.96% ann., with put premium included. These are more frequent than losses, so help to mitigate any possible losses.
Iron Mountain (IRM) was a short hold, which had a warning by Barron's, so glad to see it go - Bought last June at $6709 (with comm.), received 1 dividend $54, ITM call premium was $758, stock called at $5991 -net only $94, or 5.60% annualized at the three months return.
SDY, the dividend ETF was better at $10847 cost, $90, $778, and $10,191 returns (see above) for $212 net, or 7.82% ann.
The home run, including a sold put last Jan., was SCCO. which is better since it was 8 months term - 16.96% ann., with put premium included. These are more frequent than losses, so help to mitigate any possible losses.
Monday, September 17, 2012
VALE OF TEARS!:
Just as I was about to take a rare loss in VALE SA - the stock I recommended in a talk to the SF Options Group last Spring - industrial commodities and Vale did a turnaround after a 50% drop. I considered letting my Sept. 20 call expire 0, then noticed it is giving an October dividend, so I rolled out to Dec. to capture it, plus nice premium. Results YTBD.
Since I am going out of town before expiry this weekend, I also rolled out my KKR, took a DITM flyer on PGH (monthly dividends), PWE, and a low yielding DIA...
Since I am going out of town before expiry this weekend, I also rolled out my KKR, took a DITM flyer on PGH (monthly dividends), PWE, and a low yielding DIA...
Tuesday, September 4, 2012
10 PERCENTERS:
Recharged after a fantastic seaside vacation, I came home to find my vacation paid for by a couple 10% (annualized) takeaways:
MAT - Mattel Inc. was called away by its Oct.20 29-strike call on Aug. 24. for a 10.92% return.
STX -Seagate, which has a nice call premium, was called away in early August for a 16.45% annualized sum. (Correction - in a previous post I erred in the net profit - not 23% as stated!).
SDRL - Seadrill was just called this weekend, as with the others - the day before ex-dividend date. SDRL was an unusual ROLLUP with a special dividend, going back 9 months. It was called away ABOVE my Buy price for a 10.13% yield.
With a positive year end anticipated, I am ready to reinvest fully is some great DITM stocks.
MAT - Mattel Inc. was called away by its Oct.20 29-strike call on Aug. 24. for a 10.92% return.
STX -Seagate, which has a nice call premium, was called away in early August for a 16.45% annualized sum. (Correction - in a previous post I erred in the net profit - not 23% as stated!).
SDRL - Seadrill was just called this weekend, as with the others - the day before ex-dividend date. SDRL was an unusual ROLLUP with a special dividend, going back 9 months. It was called away ABOVE my Buy price for a 10.13% yield.
With a positive year end anticipated, I am ready to reinvest fully is some great DITM stocks.
Thursday, August 23, 2012
ANATOMY OF A LOSER?:
It is with relative peace of mind that I go on vacation next week with only 2 of my 25 existing DITM positions "under water", thanks to the upward bias of the overall market (due to Inflation, survivor bias, growth, etc.).Although it is the least desirable direction (except, of course, for the Black Swan, or Bear Market that occurs once or twice a decade - since 1900), the rally does provide a cushion for existing trades, although it makes new entries higher priced, lower in dividend %, and usually lower Implied Volatility.
Laddering positions month to month is always desirable for diversity of income payment as well as risk. In protracted stock and/or market declines (the opposite of rallies), it is possible to "step down" positions. Such was the case with Waste Management (WM), a long term holding:
My number one source for DITM candidates has been Seeking Alpha, so I was elated that they accepted my writing for them - in columns and Instablogs. It is possible that this blog may migrate over to them at some point.
Hopefully September will be a positive month for the market, although historically it is the worst one of the year. In Presidential Election years, for the past 28 (since 1900), the market has risen whether the Incumbent wins, loses, and all 28 combined years. According to the Ned Davis chart, the real divergence occurs after October 1, in the case where the Incumbent is to lose - the market tanks dramatically and remains there for the rest of the year!
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