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 | View Comments
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, Covered Calls, Options, all | View Comments
Wednesday, February 24th, 2010
The data for the chart of DIA’s dividend history below is from SPDR’s website.
DIA dividend history, click to enlarge
Posted in Advanced Topics, Dividend Capture, Mainstream, dividend, ex-dividend | View Comments
Tuesday, February 23rd, 2010
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 (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.
.
- 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.
.
- 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.
.
- 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.
.
- Saturday March 20th — Equity options expire
.
- 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.
.
- Thursday April 1st – SPY March quarterly options expire
Posted in Advanced Topics, Covered Calls, Dividend Capture, Mainstream, Options, VIX, all, dividend, ex-dividend | View Comments
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.
Snapshots from their website:
.
iShares website link for latest ex-dividend and pay date information (look for “Distribution Schedule (2010)” on right side). Includes ETFs tracking iBoxx, Barclays, JP Morgan, Dow Jones, Morningstar, S&P, Russell, MSCI, and other indexes. Snapshots from their website:
Click here if you are looking for a specific ticker symbol.
Posted in Dividend Capture, all, dividend, ex-dividend | View Comments
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.
Posted in Advanced Topics, Covered Calls, Mainstream, dividend, ex-dividend | View Comments
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):
- 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.
- 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.
- 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.
- The Roth money can’t be pulled out without penalty for 5 years after it is put in–for my case anyway
- 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.
- 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 Mainstream, all | View Comments
Sunday, February 21st, 2010
Ex-Dividend and Pay Date information from SPDR
Ex-dividend 29-Dec-09 1-Feb-10 1-Mar-10 1-Apr-10 3-May-10 01-Jun-10 1-Jul-10 2-Aug-10 1-Sep-10 1-Oct-10 1-Nov-10 1-Dec-10 29-Dec-10 01-Feb-11
Pay Date 2-Jan-10 9-Feb-10 9-Mar-10 12-Apr-10 11-May-10 09-Jun-10 12-Jul-10 10-Aug-10 10-Sep-10 12-Oct-10 9-Nov-10 9-Dec-10 06-Jan-11 09-Feb-11
BIL SPDR Barclays Capital 1-3 Month T-Bill ETF (BIL)
BWX SPDR Barclays Capital International Treasury Bond ETF (BWX)
CXA SPDR Barclays Capital California Municipal Bond ETF (CXA)
INY SPDR Barclays Capital New York Municipal Bond ETF (INY)
IPE SPDR Barclays Capital TIPS ETF (IPE)
ITE SPDR Barclays Capital Intermediate Term Treasury ETF (ITE)
JNK SPDR Barclays Capital High Yield Bond ETF (JNK)
LAG SPDR Barclays Capital Aggregate Bond ETF (LAG)
SHM SPDR Barclays Capital Short Term Municipal Bond ETF (SHM)
TFI SPDR Barclays Capital Municipal Bond ETF (TFI)
WIP SPDR DB International Government Inflation- Protected Bond ETF (WIP)
Looking for ex-dividend information for other ETFs? Check this page.
Posted in Advanced Topics, Dividend Capture, Mainstream, all, dividend, ex-dividend | View Comments
Sunday, February 21st, 2010
Ex-Dividend and Pay Date information from SPDR
Ex-dividend: 19-Mar-10 18-Jun-10 17-Sep-10 17-Dec-10 18-Mar-11
Pay Date: 31-Mar-10 30-Jun-10 29-Sep-10 29-Dec-10 31-Mar-11
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)
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 (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)
Looking for ex-dividend information for other ETFs? Check this page.
Posted in Advanced Topics, Dividend Capture, Mainstream, all, dividend | View Comments
Sunday, February 21st, 2010
The Ex-Dividend and Pay Date information below is based on Ishares distribution schedule,
Ex-Dividend 24-Dec-09 25-Mar-10 23-Jun-10 24-Sep-10 23-Dec-10 20-Mar-11
Pay Dates 31-Dec-09 31-Mar-10 29-Jun-10 30-Sep-10 30-Dec-10 20-Mar-11
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 Capture, Mainstream, dividend, ex-dividend | View Comments
