Dividend Capture

Bond or stock dividends are interesting because they are market discontinuities. Unlike surprising earnings reports, revised analyst ratings, or lawsuits dividends are usually predictable in both amount and timing. You can capture a dividend by just buying and holding onto a investment that offers them, but then you are exposed to the price movements of that instrument.

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Vance’s rules for covered call investing

The word “rules” is a bit harsh, but “guidelines” is too soft. Maximum premium is around ATM Buy-writes held to expiration have delta of 0 above the strike, -1 below the strike Don’t mess around too much with bid/ask spreads Don’t use credit / debit orders for covered call transactions unless it is a very slow moving market or if the spreads are unreasonable. Otherwise …

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Mutual Funds — what’s not to like?

Well: High fees Lack of transparency (what are they holding) Trading rules (how long you have to hold them before they don’t extract a penalty) Only bought or sold at the end of the day A track record no better, and usually worse than indexes over time Sometimes ugly tax consequences (e.g., having the value drop considerably over time and getting stuck with a capital …

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Technical Trading — what about the elves?

Exchange Trade Note TVIX and its Exchange Traded Fund cousin UVXY are 2X leveraged funds that track short term volatility.  To have a good understanding of TVIX (full name: VelocityShares Daily 2x VIX Short-Term ETN you need to know how it trades, how its value is established, what it tracks, and how VelocityShares makes money on it. How does TVIX trade?  For the most part TVIX …

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