I have been not so patiently waiting for the market to pick a direction. I have been surprised at the strength of the rebound from the lows a month ago–we are less than a point away from SPY setting 15 month highs. My gut is still telling me we are in a trading range similar to 2004 and 1999 after big bull run-ups, …
The dividend capture approaches that I describe below do work some of the time. My experience is that they expose the investor to excessive risk relative to the payoff–or they don’t pay off often enough. Buy and hold dividend paying stocks If you love the stock, this is a fine strategy, but then it really isn’t a dividend capture strategy. The dividend is just a …
Did covered calls on SDS (double short S&P 500). Bought SDS at 35.86, sold March 34 calls at 2.37 for a net investment of 33.52. Extrinsic value is .48, so the max profit potential is .48/33.52 = 1.4%
Looking forward to some possibilities in March: Oil (EFT USO) — I’m bearish right now at 38. I will probably jump back in with covered calls if it drops to the 36 range. . SPY — I’m bearish now. Will probably jump back in with covered calls if SPY drops to around 106. . Monday March 1 — Ex-dividend date for most ETFs with monthly distributions …
I closed out my SPY Feb 111 buy-write position a little early today. It would have probably closed in the money, but I didn’t like the way the market was behaving for a position that was only a few tenths in the money. Sold SPY at 111.23 and bought back the calls at .36 for a net credit of 110.87. Overall profit was 2.44 …
