I’m betting that the market is due for a downswing. If you are a sixfigure contrarian, now is the time to go long… I sold SPY short at 112.99 and bought Oct S114 calls at 1.64 for insurance. Worst case loss $2.65/share.
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Dividend capture by buying SPY and shorting IVV?
Friday, March 25th, 2011 | Vance Harwood
If your devious dividend capture plan involves you hedging against SPY’s price movements by selling IVV short until after SPY goes ex-dividend you can forget about it. The IVV (Barclays Global) price doesn’t drop by SPY’s dividend amount on SPY’s ex-dividend date. It continues to track the S&P 500 until it goes ex-dividend a few days later. Your master plan will net out with you down by at least your commission costs.
For IVV and SPY ex-dividend and distribution dates and lots of others see here.
Thanks to Jeff in the comments below for pointing out to me that IVV management doesn’t have to do anything in order for this to play out this way.
IVV vs SPY (June 2010 ex-dividends), click to enlarge
In and out with the big jump on Wednesday
Wednesday, September 1st, 2010 | Vance Harwood
At 9:51 EDT Wednesday I was setup for a couple days with my purchase at of SPY at 106.73, long S104 3-Sept puts at .23 and short S107 3-Sept calls at 0.80 for a breakeven of 106.16 and a max profit of 0.84.
Twenty minutes later I closed out SPY at 108.11, S104 puts at .08, and bought back my calls at 1.62 for a net credit of 106.57, a net profit of 0.41 per share. With almost half the available profit available that quickly I couldn’t justify holding onto the position.
SPY 31-Aug and 1st of Sept 2010
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