USO—back in at 32.40
USO continues to bounce around in its trading range. I bought USO at 32.40, and sold-to-open S33 24-Sept expiration calls at .26. Break even i s 32.14, best case profit is $0.86 / share.
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XXV behavior—it’s a pretty good VXX short
Update: I do not believe XXV is a good way to short VXX, or volatility in general. It has very little upside remaining (maximum value will be $40/share), see this post for more details. ********************************************************** With the recent action in the VIX and VXX I thought it would be good time to go back and check the performance of Barclays’ new ETN product XXV to see …
Dealing with the dividend when you have a short position
What if I’m short a security when it goes ex-dividend? You are on the hook for the dividend if you are short the stock/ETF when it goes ex-dividend. It will be subtracted from your brokerage account on the distribution date. You borrowed the stock, you are responsible for paying the owner of the security the dividend. More questions on dividends? See Top 10 questions about dividends.
Betting on a downswing
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.
Dividend capture by buying SPY and shorting IVV?
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 …
