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Monitoring the yield curve–a slow motion train wreck

Friday, February 26th, 2010

I continue to scan for ways to profit on what I believe will be the inevitable rise of interest rates in the future.   I think the classic 30 to 40% weighting in bonds that financial advisers propose for balanced risk, moderate growth portfolios is going to be a big loser in the next couple of years.

This Bloomberg webpage has a daily graphical update of the US government bills/bongs yield curve, plus going rates on TIPS, Corporates,  Municipals, etc.

This page on Smartmoney.com gives a tutorial on the yield curves, allowing you to compare today’s yield curve against historic ones, and showing the various shapes the curve can take.

This article  (“Duration–the looming scandal“) on bonds, illustrates how the duration of a bond or collections of bonds can be used to easily estimate the principal value impact of interest rate changes.

Posted in Mainstream | No Comments »

Covered call on SDS

Thursday, February 25th, 2010

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%

Posted in Advanced Topics, all, Covered Calls, Options | No Comments »

DIA dividend History: 2005 — 2009

Wednesday, February 24th, 2010

The data for the chart of DIA’s dividend history below is from SPDR’s website.

If you would like the dividend history for another security, see this post.

 

Posted in Advanced Topics, dividend, Dividend Capture, ex-dividend, Mainstream | No Comments »

Investing ideas for March: Oil, SPY, Dividend capture, VIX

Tuesday, February 23rd, 2010

Looking forward to some possibilities in March:

  1. 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.
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  2. SPY —  I’m bearish now.   Will probably jump back in with covered calls if  SPY drops to around 106.
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  3. Monday March 1  –  Ex-dividend date for most ETFs with monthly distributions (e.g., AGG, IEF, JNK, TIP).   I’m still looking for a good dividend capture play here.    Most of these funds have thinly traded options and low volatilities, so option based dividend capture schemes I’ve priced are not attractive. Best strategy I’ve seen is buying the ETF the morning before ex-dividend and selling at close that day–but this is obviously exposed to market action.   JNK could probably be hedged by going short on SPY (or long SH, SDS) , but probably not a good enough correlation to make me comfortable.  Purchases have to be made by Friday February 26th to qualify for the dividend.
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  4. Wednesday March 17th — VIX option expiration.    Currently the VIX index is running in the low twenties.    I don’t have any feel for direction right now–staying on the sidelines, awaiting inspiration.
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  5. Friday March 19th — Ex-dividend date for DIA.   My February dividend capture approach worked well–will have to see how the market is behaving 4 or 5 days before.   My dividend history chart suggests the payout will be around $0.24.
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  6. Friday March 19th — SPY ex-dividend (estimated payout of $0.52) date–also ex-dividend date for many  SPDRs funds with quarterly distributions.  Schwab’s new no commission ETFs will probably go ex-dividend on the 19th also.   I will probably use the same dividend capture /  early option exercise approach I used on DIA (sell ITM calls 4 or 5 days before the ex-dividend with extrinsic values about equal to the the dividend payout).  It works very well in a flat or uptrending market.  I typically use both the monthy SPY options and the quarterly SPY options, which expire 31-March (symbol RDQ).    The dividend payout gives an additional ~$0.5 margin on break-even if the market goes against you.
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  7. Saturday March 20th — Equity options expire
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  8. Thursday March 25th  – IVV ex-dividend (estimated payout of  $0.50) date–also ex-dividend date for many iShare funds with quarterly distributions.    IVV’s options historically have not been attractive for my ITM option dividend capture approach, so I usually sit out this one.  Still looking for a good candidate however.
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  9. Thursday April 1st  – SPY March quarterly options expire

Posted in Advanced Topics, all, Covered Calls, dividend, Dividend Capture, ex-dividend, Mainstream, Options, VIX | No Comments »

Ex-Dividend Archive information: SPDR, iShares

Monday, February 22nd, 2010

SPDR website link for latest ex-dividend and pay date information   (look for “ETF dividends” link).  Includes ETFs tracking  Barclays, ,Diamond,  Dow Jones, Morgan Stanley, MSCI,  KBW,  Russell, S&P, and other indexes.

From their website:

iShares website link for latest ex-dividend and pay date information   (look for “Distribution Schedule (2011)” on right side).  Includes ETFs tracking  iBoxx, Barclays, JP Morgan, Dow Jones, Morningstar,  S&P, Russell, MSCI, and other indexes.

  • Historical distributions document
  • Click here if you are looking for a specific ticker symbol.

Posted in all, dividend, Dividend Capture, ex-dividend | No Comments »

Out of Oil and SPY

Monday, February 22nd, 2010

My USO position and my remaining SPY covered call positions were called this weekend, so I’m back to about 90% cash.  Despite the scary stuff in the last couple of weeks, they ended up yielding their maximum profit potential.

Oil looks expensive right now, so I wouldn’t be surprised to see a pull back there.   The S&P 500 could certainly go higher with this rally, but looking at the 250 day chart the resistance level at 111 really stands out.  This one could be tough to break through. Click chart to enlarge.

SPY22Feb10

Posted in Advanced Topics, Covered Calls, dividend, ex-dividend, Mainstream | 1 Comment »

Twists and turns in converting a traditional IRA to a Roth

Sunday, February 21st, 2010

The change of the tax laws to allow everyone to convert their traditional IRAs into ROTH IRAs in 2010 was a nice present to the tax advisor community.  The issues with this one were nearly enough to make even me, a die hard do-it-yourselfer, seek professional advice.   Instead of paying for advice, I called the IRS.  The woman I talked to in the IRA department was very helpful, seemed very credible–and contradicted some the advice of the people I talked to from Fidelity (800-FIDELITY) and Schwab (800-424-5750).

The key documents I was able to find were IRS form 8606 and its instructions, and publication 590.   My discoveries / conclusions (disclaimers apply):

  1. All the IRAs / SEP / similar accounts (see IRS for specifics) for a individual need to be summed together when considering a conversion.  You can’t convert the account with all post-tax dollars, without accounting for the pre-tax contributions you might have in another account.
  2. Even if you are married, filing jointly, point 1 applies.   You don’t have to combine the husband’s and wife’s accounts together, just all of the accounts of the person that is converting.
  3. Don’t intermingle tax year 2010 contributions in with the conversion.  Some people are claiming there is a loophole that allows 2010 contributions to be converted this year.   The IRS person I talked with said the conversion is intended for 2009 and older contributions–mixing in 2010 contributions looks like a recipe for confusion.   The IRS person suggested that the simplest approach is to zero-out the old accounts by transferring everything (the old accounts don’t need to be closed) before 2010 contributions are made.
  4. The Roth money can’t be pulled out without penalty for 5 years after it is put in–for my case anyway
  5. Both Fidelity and Schwab offer the same capabilities (e.g., option trading level capabilities) in both the traditional and Roth IRA.  Brokers aren’t consistent on this, so be sure to ask if you’re not sure if something is allowed in the IRA account.
  6. Using money from the IRA you are converting to pay taxes due to the conversion seems like a really bad idea.  For starters you will likely have to pay the 10% early withdrawal penalty.

I plan to do a total conversion, a partial conversion looks like a long term headache.

Additional resources:

Posted in all, Mainstream | No Comments »

Ex-dividend and Pay date information for: BIL BWX CXA INY IPE ITE JNK LAG SHM TFI WIP

Sunday, February 21st, 2010

Please see this post for updated information on these iShares ETFs.

Posted in Advanced Topics, all, dividend, Dividend Capture, ex-dividend, Mainstream | No Comments »

Ex-dividend and Pay date information for: DSG DSV ELG ELV MTK RWR XLB XLE XLF XLI XLK XLP XLU XLV XLY

Sunday, February 21st, 2010

Ex-Dividend and  Pay Date  information fromSPDR

Ex-dividend: 16-Mar-12 15-Jun-12  21-Sep-12   21-Dec-12

Pay Date:   28-Mar-12  27-Jun-12  3-Oct-12   3-Jan-12

XLB Materials Select Sector SPDR Fund (XLB)
XLE Energy Select Sector SPDR Fund (XLE)
XLF Financial Select Sector SPDR Fund (XLF)
XLI Industrial Select Sector SPDR Fund (XLI)
XLK Technology Select Sector SPDR Fund (XLK)
XLP Consumer Staples Select Sector SPDR Fund (see below for XLP dividend history)
XLU Utilities Select Sector SPDR Fund (XLU dividend history)
XLV Health Care Select Sector SPDR Fund (XLV)
XLY Consumer Discretionary Select Sector SPDR Fund (XLY)

 

Ex-dividend: 16-Mar-12 15-Jun-12  21-Sep-12   21-Dec-12

Pay Date:   28-Mar-12  27-Jun-12  3-Oct-12   4-Jan-13

DSG SPDR Dow Jones Small Cap Growth ETF (DSG)
DSV SPDR Dow Jones Small Cap Value ETF (DSV)
ELG SPDR Dow Jones Large Cap Growth ETF (ELG)
ELV SPDR Dow Jones Large Cap Value ETF (ELV)
MTK SPDR Morgan Stanley Technology ETF (MTK)
RWR SPDR Dow Jones REIT ETF (RWR)

 

Looking for ex-dividend information for other ETFs?   Check this page.

XLP dividend history

If you would like the dividend history for another security, see this post.

 

Posted in Advanced Topics, all, dividend, Dividend Capture, Mainstream | 3 Comments »

Ex-dividend and Pay date information for: IJH IJJ IJK IJR IJS IJT ISI IVE IVV IVW OEF HDV

Sunday, February 21st, 2010

The Ex-Dividend and Pay Date  information below is based on Ishares distribution schedule,

Ex-Dividend  26-Mar-12  19-Jun-12  25-Sep-12  19-Dec-12  27-Dec-12 (potential)

Pay Dates  30-Mar-12  25-Jun-12  1-Oct-12  26-Dec-12  3-Jan-12 (potential)

HDV High Dividend Equity Fund

IJH  S&P MidCap 400 Index Fund
IJJ  S&P MidCap 400 Value Index Fund
IJK  S&P MidCap 400 Growth Index Fund
IJR  S&P SmallCap 600 Index Fund
IJS  S&P SmallCap 600 Value Index Fund
IJT  S&P SmallCap 600 Growth Index Fund
ISI  S&P 1500 Index Fund
IVE  S&P 500Value Index Fund
IVV  S&P 500 Index Fund
IVW  S&P 500 Growth Index Fund
OEF  S&P 100 Index Fund    

for DVY  see Dividend, Ex-dividend Date , Pay Date: Ishares: DVY

Looking for ex-dividend information for other ETFs?   Check this page.

Posted in Advanced Topics, dividend, Dividend Capture, ex-dividend, Mainstream | 1 Comment »

« Previous Entries

SYMBOL Next Ex-dividend More Info
DIA 20-Jan-12 SPDR
DVY 26-Mar-26 iShare
IVV 26-Mar-12 iShare
IWM 23-Mar-12 Russell
JNK 1-Feb-12 SPDR
IEF,HYG,LQD 1-Feb-12 iShares
OEF 26-Mar-12 iShares
SCHX 19-Mar-12 Schwab
SPY 16-Mar-12 SPY
VIG 23-Mar-12 (est) Vanguard
VOO 23-Mar-12 (est) Vanguard
XLU 16-Mar-12 SPDR
More Tickers
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Bloomberg Rolling 1M vol.  SPVXSTR

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