2 Dow Dividend Stocks Analysts Are Clueless About [View article]
CORRECTION: "However, the two examples below have strike prices above CAT's current STRIKE PRICE, and offer the potential for an additional $3.80/share in price gains, if your shares get assigned." This statement should read: However, the two examples below have strike prices above CAT's current STOCK PRICE, and offer the potential for an additional $3.80/share in price gains, if your shares get assigned.
3 High-Dividend Stocks With Strong Growth [View article]
CORRECTION: Projected Pre-Expiration DIvidends to be collected for NUE are $.73 in Covered Call trade. Same amount, $.73, for comparison only, during Put trade, since Put Sellers don't collect dividends.
How To Earn A 20% Yield On Dow Dividend Stocks [View article]
Corrections: Due to Microsoft's dividend increase announcement, here are the following corrections for this article: 1. Microsoft just announced an even bigger dividend increase for the third quarter, rising to $.20 from $.16/share, which gives it a 3.19% dividend yield. The next ex-dividend date is 11/15/11.
2. Options vs. Dividends: In these 2 strategies the option yields outstrip the dividend yields by up to over 10 times.
- The call option premiums for MSFT pay nearly over 9 times that of MSFT's dividends during this 4-month period, ($1.78/call premium vs. $.20/dividend).
- MSFT pays $2.10 for Put option premiums vs. $.20 for dividends.
The corrected dividend and option yields for MSFT are listed in our Covered Call and Cash Secured Puts Tables on our website.
Three Undervalued Chinese Dividend Stocks [View article]
Dear China Expert, Thank you for your heads up - we were in error - We double-checked their filings, and you are correct - TPI doesn't currently pay a dividend. We posted a correction to this article.
Three Undervalued Chinese Dividend Stocks [View article]
7/31/10 CORRECTION: TPI does not currently pay a dividend, having elected to discontinue their quarterly dividends after their Q1 2010 payout. However, we still feel that this stock has good growth prospects.
Dave, Thanks for your comment. One of the most important facts to know about options, is that over 75% of options expire worthless, which means that, as an options seller, you have a great advantage over options buyers.
Update: The sold put option listed in this article is now showing a 36% profit in 2 weeks.
Selling Put Options: Immediate Cash Yields, Deferred Taxes [View article]
Thank you all for your comments. This article addresses the idea of selling cash-secured puts only. The put yields that are listed are based upon 100% cash reserve. Indeed, if you have option level 3 approval, you can reduce the cash reserve to approx. 25%. I've found it helpful, though, to maintain an automated table that calculates my total assigned exposure for each stock, which keeps this leverage in perspective. My table also shows the % difference between the stock's current price and my breakeven.
Warren Buffett Portfolio: Going Beyond the Folksy Stereotypes to Find All-Star Stocks [View article]
Marc, Thanks for writing such a well-researched article. Olin has some volatility, which has inflated its put options. Selling $10.00 and $12.50 puts for Olin has been a very profitable strategy this year.
Abbot Laboratories: A Healthy Dividend Aristocrat [View article]
David, Thanks for your comments. It looks like we "agree to disagree" about the covered call approach. Like many other investors, i utilize covered calls to augment the income I receive from dividend paying stocks. This has also proven to be a prudent way to achieve additional downside protection, particularly in this recent era of rampant dividend cuts. It's a well-known fact that call options often dwarf the value of dividend payouts, and, they can never be cut.
Concerning the concept of price appreciation, I prefer to know what my upside profit and my downside protection are before I invest, as opposed to just buying and hoping for price appreciation. The past 12 months has only strengthened this conviction. All the best, Robert Hauver
On Jul 23 10:26 AM David Van Knapp wrote:
> Abbott's a very good dividend stock. But I have a question: If you > are an "income investor," why are you messing around with covered > calls or options of any kind? Keep it simple: Buy the stock for its > dividend and solid business potential, which could lead to decent > price appreciation. Don't mix trading strategies with a dividend > strategy. > > You'd have more credibility if you actually owned ABT.
Gannett: Media Companies Still Have Value Today [View article]
If you're moderately bullish on GCI, a high yield/low risk way to profit from these shares would be to sell OCT $2.50 puts, which are currently bid at $.30. This gives you an approx. annualized yield of 36%, assuming a 100% cash reserve. If you get assigned the shares, your net cost = $2.20, which is 19% above the 52-week and all-time low.
If You Own Google, Watch These 3 Trends [View article]
2 Dow Dividend Stocks Analysts Are Clueless About [View article]
This statement should read:
However, the two examples below have strike prices above CAT's current STOCK PRICE, and offer the potential for an additional $3.80/share in price gains, if your shares get assigned.
3 High-Dividend Stocks With Strong Growth [View article]
Same amount, $.73, for comparison only, during Put trade, since Put Sellers don't collect dividends.
Top 5 U.S. Dividend Stocks For 2012 [View article]
How To Earn A 20% Yield On Dow Dividend Stocks [View article]
1. Microsoft just announced an even bigger dividend increase for the third quarter, rising to $.20 from $.16/share, which gives it a 3.19% dividend yield. The next ex-dividend date is 11/15/11.
2. Options vs. Dividends: In these 2 strategies the option yields outstrip the dividend yields by up to over 10 times.
- The call option premiums for MSFT pay nearly over 9 times that of MSFT's dividends during this 4-month period, ($1.78/call premium vs. $.20/dividend).
- MSFT pays $2.10 for Put option premiums vs. $.20 for dividends.
The corrected dividend and option yields for MSFT are listed in our Covered Call and Cash Secured Puts Tables on our website.
Three Undervalued Chinese Dividend Stocks [View article]
Thank you for your heads up - we were in error - We double-checked their filings, and you are correct - TPI doesn't currently pay a dividend.
We posted a correction to this article.
Three Undervalued Chinese Dividend Stocks [View article]
Turning Apple Into an Income Stock [View article]
Turning Apple Into an Income Stock [View article]
Thanks for your comment.
One of the most important facts to know about options, is that over 75% of options expire worthless, which means that, as an options seller, you have a great advantage over options buyers.
Update: The sold put option listed in this article is now showing a 36% profit in 2 weeks.
Selling Put Options: Immediate Cash Yields, Deferred Taxes [View article]
Warren Buffett Portfolio: Going Beyond the Folksy Stereotypes to Find All-Star Stocks [View article]
Thanks for writing such a well-researched article. Olin has some volatility, which has inflated its put options. Selling $10.00 and $12.50 puts for Olin has been a very profitable strategy this year.
Abbot Laboratories: A Healthy Dividend Aristocrat [View article]
Thanks for your comments. It looks like we "agree to disagree" about the covered call approach.
Like many other investors, i utilize covered calls to augment the income I receive from dividend paying stocks. This has also proven to be a prudent way to achieve additional downside protection, particularly in this recent era of rampant dividend cuts.
It's a well-known fact that call options often dwarf the value of dividend payouts, and, they can never be cut.
Concerning the concept of price appreciation, I prefer to know what my upside profit and my downside protection are before I invest, as opposed to just buying and hoping for price appreciation. The past 12 months has only strengthened this conviction.
All the best,
Robert Hauver
On Jul 23 10:26 AM David Van Knapp wrote:
> Abbott's a very good dividend stock. But I have a question: If you
> are an "income investor," why are you messing around with covered
> calls or options of any kind? Keep it simple: Buy the stock for its
> dividend and solid business potential, which could lead to decent
> price appreciation. Don't mix trading strategies with a dividend
> strategy.
>
> You'd have more credibility if you actually owned ABT.
Gannett: Media Companies Still Have Value Today [View article]
This gives you an approx. annualized yield of 36%, assuming a 100% cash reserve.
If you get assigned the shares, your net cost = $2.20, which is 19% above the 52-week and all-time low.