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  • Earnings Update: Eaton Vance Buy-Write CEFs [View article]
    Like Doug stated, it is important to track the NAV to determine how management is operting with the assets. But I caution that you do not discount the importance of market price. If you need to sell your shares you receive market price not NAV. For example, ETB had a market price of $14.41 on 12/31/2010 and $12.84 on 12/30/2011. This is a 12% loss in price. Some CEFs can sell at a discount to NAV for a long period of time. Personally, I do not like to see a sharp decline in NAV or market price unless the CEF is a long-long hold and I am reinvesting distributions.

    Just a note of caution for discussion.
    Jan 18 01:44 PM | Likes Like |Link to Comment
  • Earnings Update: Eaton Vance Buy-Write CEFs [View article]
    Eaton Vance released the 9 months ending 9/2011 earnings report in a press release. These are the numbers they reported for each of the listed funds by Eaton Vance. You can find the press releases at their website.
    Jan 13 06:33 PM | 1 Like Like |Link to Comment
  • Can Your Closed-End Fund Sustain Its Distribution Rate? [View article]
    My calculations come from documents filed with the SEC so this information is the best available to the public. I can't speak for CEF connect as they provide their own data on their website. The variation of information provided across various CEF sites led me to use the SEC documents to be more acurate.
    Dec 30 12:09 PM | Likes Like |Link to Comment
  • Can Your Closed-End Fund Sustain Its Distribution Rate? [View article]
    Option premium is not recognized until the trade has been completed as many things can happen to diminish open option premium before the trade is completed. By using net income, it is actual realized income not including unrealized option income that may or may not materialized at the trade close. As a covered call trader, I can tell you that the option premium from selling calls is not the same as my income at trade close.
    Dec 29 03:14 PM | 1 Like Like |Link to Comment
  • Can Your Closed-End Fund Sustain Its Distribution Rate? [View article]
    DNP is trading at $10.38 today which is down ($0.70) or 6.4%. This is more than enough of a price drop to avoid this CEF at this time. I did not see any recent news about this CEF so I suspect a distribution cut or return of capital in the coming months.
    Dec 29 03:07 PM | Likes Like |Link to Comment
  • Can Your Closed-End Fund Sustain Its Distribution Rate? [View article]
    Thanks for your comments. I plan to add this type of CEF analysis to my existing newsletter starting on January 2012. For those with an interest, you can get more info here:

    http://bit.ly/w3jjmh
    Dec 28 04:09 PM | Likes Like |Link to Comment
  • The Best Buy-Write Closed-End Funds [View article]
    Thanks for your comments and questions. Let me see if I can answer them here.

    While researching this article, I went back to the semi & annual reports for NFJ. I did not find any indication that NFJ issued any additional shares over this time period. Therefore, the ROC is more likely to be unrecognized premium income. If they had issued new shares, then I would be concerned about the ROC.

    The share price of CEFs will flucuate with the over stock market sentiment as well as changes in NAV. The income investor can take advantage of the additional discount as measured by the Z score (which I wrote about in a recent CEF article on seekingalpha). If you want to add to an existing position, do so when the Z score is below -2.0 for a deeper discount on share price than the 1 year average discount.
    Dec 18 04:12 PM | Likes Like |Link to Comment
  • 5 CEFs With 10% Or More Distribution Yields [View article]
    As I mentioned in the note above, SLA made changes to their distributions on 10/2011. This is where they hiked the distribution and stopped ROC. This is an indication that the management is stronger than in the past. This is a CEF making a strategic change for the better.
    Dec 15 08:14 PM | Likes Like |Link to Comment
  • 5 CEFs With 10% Or More Distribution Yields [View article]
    SLA adjusted its distribution from $0.667 to $0.725 in 10/2011. SLA has a monthly income of $0.725 since 10/2011 - which it is paying in dividends without any return of capital. It has a 3-mon return of 1.05% and a 12-month return of 8.12%. These stats come from Morningstar. I do not use YF for any CEF analysis so I can't speak to their numbers.
    Dec 15 01:59 PM | Likes Like |Link to Comment
  • 5 CEFs With 10% Or More Distribution Yields [View article]
    Thanks for your comment. I actually do my own covered call trades on individual stocks. This is a nice idea for a new article. I will do some reseach on buy/write funds.
    Dec 15 01:13 PM | Likes Like |Link to Comment
  • Analysis Of 'Best Stocks Of 2012' Lists - Who Wins? [View article]
    The Equity Summary Score provides a consolidated view of the ratings of 10+ independent research providers. It uses the providers' relative, historical recommendation performance along with other factors to give you an aggregate, accuracy-weighted indication of the independent research firms' stock sentiment.

    Finally, smaller cap stocks are then slotted into this distribution without a force ranking, and may not exhibit the same balanced distribution.

    The equity score is based on current analyst ratings. The normalized analysts' recommendations and the accuracy weightings are combined to create a single score. For the largest 1,500 stocks by market capitalization, these scores are then forcibly ranked against all the other scores to create a standardized Equity Summary Score on a scale of 0.1 to 10.0 for the 1,500 stocks. This means that there will be a uniform distribution of scores provided by the model thereby assisting investors in evaluating the largest stocks [in terms of capitalization], which typically make up the majority of individual investors portfolios.
    Dec 10 02:16 PM | Likes Like |Link to Comment
  • Monthly Dividend CEFs Beating the S&P 500 [View article]
    This is the ultimate way to use a CEF to grow your monthly income over time. As long as a % of distributions goes back into more shares, it will grow forever. Thanks for sharing.
    Dec 9 05:45 PM | Likes Like |Link to Comment
  • Covered Call Trade On Akamai Technologies, Inc. [View article]
    The objective of the trade is to create income not go long the takeover potential. When volitility increases due to takeover rumors you get a higher premium so you get more income from selling the call option. As soon as the RUMOR subsides, then you have volatility collapse and the call sold value collapses as well. So you get a higher income and the potential for volatility collaspe. The most important thing about investing is to keep the objective in mind: here it is more premium for income not going long on speculation of a takeover.
    Dec 7 07:19 AM | Likes Like |Link to Comment
  • For Dividend Income Investors: A More Tactical Approach To Covered Calls [View article]
    Thanks, You are correct, it is $1,000 loss. The other way to sell the 100 shares is to WRITE a DITM Covered Call at 85 and collect the premium for selling at 85 when the stock is at 95.
    Dec 2 12:10 PM | Likes Like |Link to Comment
  • Covered Call Trade On Akamai Technologies, Inc. [View article]
    To BreakoutTrader, it is true that rumors have been circulating that AKAM is a potential takeover target. The theory behind this trade is the speculation of a takeover. When investors hear a rumor of a takeover, they want to buy a call like you suggested. This increase in demand for the calls will increase their volatility and price so the call option become overvalued. When a option is overvalued, you want to SELL the option not buy it. You see the takeover may never happen, then the volatility will collaspe taking the call option down with it. The option writer will make money as the call sold has a lower price than premium received when initally sold. Therefore, a covered call makes money both ways: without a takeover and when the takeover happens.
    Dec 2 11:32 AM | Likes Like |Link to Comment
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