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Some SPY dividend capture strategies I don’t recommend:

1. Sell SPY short right before closing the day before ex-dividend

• Rationale:  Securities tend to drop by about the dividend amount when trading begins (pre-open trading)
• Problem:   The buyer that bought the stock from you deserves the dividend and the loaner that loaned you the stock you sold (probably unknowingly), deserves the dividend too.  Two dividends, one share of stock–you make up the difference.  You will have the dividend amount subtracted from your account.

2.  Create a covered call position with SPY right before ex-dividend by buying SPY and selling  deep in the money calls

• Rationale:  You own the stock, so you will collect the dividend.  The value of the short calls moves in direct opposition to the value of SPY, so you have a near perfect hedge, with very little risk from anything other than a total market meltdown.   The options expire the next day after the ex-dividend date so the position automatically closes itself out the weekend after the ex-dividend.
• Problem:  If the premium value of the SPY calls is significantly lower than the dividend amount (which is a certainty with deep in the money calls near expiration) your calls will very likely  be assigned.  Your stock will be called away, and you will not collect the dividend.  Unless you received some premium when you created your covered call position (if your breakeven price is  less than the strike price)   you have just paid commissions for nothing.

3.  Buy SPY and sell the same number of IVV (the iShares version of SPY) short

• Rationale:  Since IVV goes ex-dividend a few days after SPY there is time to buy back IVV before its dividend is due.  SPY and IVV both track the S&P index, pretty much exactly, so the long and short position are perfectly hedged.
• Problem: The value of IVV jumps by the value of the SPY dividend on the SPY ex-dividend date.  That offset continues until IVV declares its dividend.  At that point the two ETFs go back to tracking each other with IVV typically being  ~$0.40 higher.   Your losses in your short IVV position cancel out your dividend gains from holding SPY.  Only your broker is happy.