A Covered Call That’s Long Volatility

Covered calls are an example of  positions that are short volatility.  I hadn’t thought of it that way until Sheldon Natenburg, the author of Option Volatility & Pricing  pointed that out in a fascinating interview in Expiring Monthly  (http://tinyurl.com/6wwplf9).   A covered call position is profitable if the underlying equity stays the same or goes up, but in a big market downswing, when volatility spikes up,  the modest …

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Stock Dividends

For updated information on SPY, IVV, and VOO dividends see this post. Some dividend related info: Excluding market action, Stock/ETF prices will drop by about the dividend amount when opening on their ex-dividend date.   The equity no longer carries the value of the dividend, so it drops in value.  The 500 stocks comprising the S&P index don’t go ex-dividend en-mass on the 17th, so the index …

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Overview of dividend capture strategies

I have written several posts on dividend capture strategies. My favored, although far from perfect strategy: Dividend capture with covered calls Some approaches I don’t recommend: SPY dividend capture ideas that don’t work Dividend capture—three approaches to skip Additional background and tools, and an example: Dividend capture overview Covered calls–are you ready? Combo orders–maximizing profits on covered calls DIA dividend capture: creating the position DIA …

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My Schwab Christmas 2011 wish list

Update:  Schwab has added weekly and quarterly option support to all of their trading platforms.  See here for more information. Schwab has provided a peek under the tree for the account holders they think have been good: Stocking stuffers (not available until January): A 35% discount for TurboTax.  In your Schwab account online look for “Tools and Calculators” under “Guidance”, then look for “File with …

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Get weekly updates on the Weeklys

The CBOE has announced a nice new email service for people wanted to know what weekly options are going to be offered each week.  While the list has been relatively stable the CBOE recently extended the list to 35 offerings and they usually make a few tweaks each week.   For example, they recently dropped USO in favor of NDX—something I’m not happy about. They …

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