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

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


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