Overview of dividend capture strategies

I have written several posts on dividend capture strategies. My favored, although far from perfect strategy: Dividend capture with covered calls Some approaches I don’t recommend: SPY dividend capture ideas that don’t work Dividend capture—three approaches to skip Additional background and tools, and an example: Dividend capture overview Covered calls–are you ready? Combo orders–maximizing profits on covered calls DIA dividend capture: creating the position DIA …

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Computing the leverage of CVOL compared to the VIX index

Any strategy that hopes to offset down days in the market with volatility products that go up on those same days needs to figure out how much leverage the volatility product provides.   A little calculation produced the equation below for computing the expected price of Citigroup’s CVOL from the VIX index quote: (VIX – 10) * 9.6 = CVOL So if the VIX jumps …

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Will CVOL become the next VXX?

When Barclays ‘ VXX ETN first came out early last year I was pretty excited.   Having an direct investment in a volatility product that didn’t have the time decay (theta) of VIX options was attractive.   However, it turns out that price erosion on VXX is a huge issue—anyone that holds on for the long term becomes a loser.    In spite of this, …

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Three weeks of CVOL—a wild ride

Redirected   Citigroup’s new volatility ETN, CVOL has only been trading since November 15th, but it is starting to show some intriguing results.   Designed as a 2X leveraged volatility offering, in a class of products that are already known for volatility, we can expect a wild ride.  So far it has lived up to its billing with a high of around 110, and a …

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