19709

50 Four-Day September Expiration Option Ideas

The article was published on 9/15 as indicated at the top and confirmed by the author's statement that there were 4 days left to options expiration which was on 9/18.


On Sep 15 09:42 PM S2009 wrote:

> The table is incomplete, no price at the time of publication or no
> bid/ask for options. So if you do not see this table exactly at the
> moment of publication (which is not shown, is it Sep 2009 or Jan
> 2007 - nobody knows) it is basically useless.

4 Dividend Stocks to Hedge Against Social Security Failure

Incorrect.

*The author is expecting to live off the dividends, not any appreciation in the stock.
*If the dividend is great, the stock will not lose all value. Why? Because investors will buy the stock in order to realize the dividend yield which will stabilize the stock's price if not cause it to appreciate.
*Dividend growth implies growth in earnings. Companies are in fact increasing dividends despite this recessionary period.



On Aug 26 02:29 PM TonyP4 wrote:

> This is the common misconception to buy high-paying dividend stocks.
>
>
> * return = price appreciation + dividend
> If the price appreciation is good, just sell the stock and use part
> of the gain as income.
>
> * For the same equation, it will not help you when the dividend is
> great but the stock loses all the value.
>
> * Dividend growth normally implies stock appreciation. But, not in
> the current phase of a market cycle (market bottom).

4 Dividend Stocks to Hedge Against Social Security Failure

One correction: Interest earned in a ROTH IRA is not taxable. Have you thought of supplimenting your dividend income by selling covered calls?


On Aug 26 08:51 AM whisperonthewind wrote:

> I agree that we need to supplement Social Security, whether it's
> with a personal IRA/401k or dividends. I began with a Roth, preferring
> not to have to pay additional taxes at distribution time, except
> on the interest, but my general portfolio (outside the Roth) was
> doing so much better that I've since concentrated on that. I aim
> for stocks with dividends (although not exclusively) and I aim for
> 5% or better. My goal is to have the dividends available in the future
> to use as that supplement, and to save the base stocks for my family
> to inherit and hopefully use for the same purpose. I think of it
> as my own personal social security.
>
> Although I initially bought stocks emotionally, I no longer listen
> to the advice by public analysts - now it's for the yield, and 2
> to 3% is not nearly enough for me. I had a lot of oil stocks last
> year, and watched the price of gasoline go up without caring. My
> fuel efficient car helped there, and my dividends more than covered
> the higher costs, even while increasing my stock base. I now have
> a few more financials, and although their dividends are not up to
> my standards, their base value has tripled and the dividends will
> come back. The oil stocks are still covering my fuel costs (and then
> some), and are also still increasing my base.
>
> On the sidelines, but still evident, are the tanker stocks (waiting
> for the next push) and housing stocks (also starting to come back),
> and the utility stocks (holding their own).
>
> With luck, I will get enough in the dividends to supplement my income
> and cover the additional taxes from the income. And if I'm really
> lucky, I won't care if Social Security is there or not.

4 Dividend Stocks to Hedge Against Social Security Failure

You're forgetting the compounding effect of increasing dividends, not to mention the likely appreciation in the stock price (your bse investment).


On Aug 26 08:08 AM Oldguy67 wrote:

> The average person(family) can not accumulate
> enough funds to support themselves in a long
> retirement based on a 2 or 3% return.
>
> If you only get 3% return on a million dollars you will
> only generate $30,000.00 anual income. That is a
> less than average income for 2 people much less
> if it has to support more people.
>
> The fact these stocks consistantly raise their dividends
> is meaningless when they pay out such a low percent
> of the base investment.

Colonial Bank Failure Highlights the Problem

I wouldn't listen at this point either. Citi's price is now up to $5.08.


On Aug 24 09:17 AM Angry Banker wrote:

> Another predictable rant by Mr. Nielson based on over-simplified
> comparisons of asset markdowns after completely separate deals and
> under completely separate circumstances. I thought SA was supposed
> to be a site where investment theses were discussed. I guess Jeff
> is suggesting shorting Citi? Wait, of course that's always been his
> position, hasn't it? When I suggested in my June 24th article that
> Citi was too important to fail and thus a good long term investment
> opportunity, the ranters came out in full force against the company
> (as usual). The stock was trading around $3.00 then. Now it's over
> $4.75. Good thing I didn't follow Jeff's views on Citi's prospects
> at that time.... should I listen now?

The Disconnect Between Oil and Natural Gas Prices

Good strategy


On Aug 23 09:25 AM dirtyharry wrote:

> One way to get into natural gas in through the ETF trading under
> UNG. However, this is not a perfect substitute for the underlying
> commodity. As the author as stated, when prices will normalize is
> unknown, but when a commodity gets close to its cost of production,
> it tends to stop falling because production ceases to add more inventory.
>
>
> Because of the unknown time frame, one of the best ways to play natural
> gas with with covered calls: Going long (buying) UNG, and then selling
> slightly OTM (out of the money) calls to collect a premium.

Banking on Banks: Detailed Option Strangle Strategy

Tsk tsk tsk. If you don't like the market, you don't have to participate.


On Aug 26 08:15 AM apppro wrote:

> These types of trades & trading are actually what is 'STRANGLING'
> our markets and society as a whole. All this options trading has
> turned into a ponzi gambling scheme that will crash our system and
> adds NOTHING now. They say it adds liquidity - BS! If anything all
> that money being thrown about on ultra short term trades is NOT being
> invested on long-term basis.. it actually takes money OUT of the
> pool and contributes NOTHING to our economy - ever.
>
> We need to figure out a way to stop all this insanity and not come
> up with new methods on how to make it worse. I am still convinced
> that the best way is to TAX these trades as if they were gambling
> wins somewhere around 50%. That'll stop it, and even if it doesn't
> it will help pay for the mess all these trader's/traitor's insanity
> cause.

Two Citigroup Income Generating Option Strategies

Let's see. I bought the stock on 8/11 for $3.72. Today (8/13) I sold August $4 calls @ $0.21 and expect to be called at expiration. Before commissions, that would be a return of 13%+ in 11 days. After commissions, the 11 day return would be 12%+. If C closes below $4 at expiration, I will have lowered my per share cost to $3.53 after commissions and will write calls again.


On Aug 12 07:44 PM Ricard wrote:

> One clarification, when he writes his covered calls, instead of being
> 'forced to cover' he is instead forced to eat the losses garnered
> through holding C. Like I already mentioned, for a stock this volatile,
> losses over 11 days can easily get into the high teens, if not 30-40%,
> without any news, or any rhyme or reason causing the swings in price.
> So, he keeps his 6% premium and loses the farm. This will probably
> happen 50% of the time if he chooses to 'annualize'.
>
> The odds are not in favor of making the trade Marco suggests, unless
> you have a crystal ball that can predict daily/weekly movements of
> any stock. I'm sorry, but mine broke last week, so I'm using LEAPs
> instead, and buying calls, not writing them.

Two Citigroup Income Generating Option Strategies

For further justification of Marco's suggestions, I refer you to. . .
seekingalpha.com/artic...
. . . your own article in which you state the reasons for the "not faint of heart" to trade options on C.




On Aug 12 11:02 AM Ricard wrote:

> That high volatility kills his strategies as well. High volatility
> equates to fat premiums, but you STILL must be correct in direction
> if you use either of Marco's strategies. For a 5% gain, his strategies
> are far too risky for the infinitesimal returns he is suggesting
> you accept.

Two Citigroup Income Generating Option Strategies

Let's see - 6% gain in 11 days equates to an annualized gain of 199%. Doesn't sound infinitesimal to me. And don't forget, good old Uncle Sam isn't going to let this company fail and throw away $45 Billion in the process.


On Aug 12 11:02 AM Ricard wrote:

> That high volatility kills his strategies as well. High volatility
> equates to fat premiums, but you STILL must be correct in direction
> if you use either of Marco's strategies. For a 5% gain, his strategies
> are far too risky for the infinitesimal returns he is suggesting
> you accept.

Two Citigroup Income Generating Option Strategies

The uncertainty engulfing Citi's management and the extent of its credit problems adds to the stock's volatility. The extreme volatility is the basis for Marco's suggested option trades.


On Aug 11 08:53 AM john s. gordon wrote:

> if citi has been left in the dust compared to the others, there is
> probably a reason.....

Two Citigroup Income Generating Option Strategies

You are ignoring the downside protection afforded by the option premium. Unless the stock price at option expiration falls below the premium adjusted stock cost, selling the option has in fact generated income.


On Aug 11 08:53 AM jamo59 wrote:

> calvin has it spot on correctly~~
> thanks for expanding on it thoroughly......
>
> On Aug 11 08:49 AM jamo59 wrote:

Two Citigroup Income Generating Option Strategies

Marco's point in using C is its high volatility. Coupled with the fact that the U.S. Government is more than a > 30% owner of C and consequently cannot afford to let it fail, generating a 6%+ "dividend" in 11 days is extremely enticing. Also remember than Marco is trying to educate individuals who may never have traded options.


On Aug 11 08:49 AM jamo59 wrote:

> agree with acttang...rather amateurish........if you want those buy/write
> returns, do it with dozens of much more enticing stks.....

Buffett's Betrayal

GEICO is the 3rd largest insurance company and it's owned by WB.


On Aug 07 08:30 AM Dave Shafer wrote:

> Sven, point taken on using life insurance for estate planning. Show
> me the facts on how much life insurance Buffett's companies sell?
> How much market share in life insurance do they have?

Buffett's Betrayal

Was Lou Gehrig?


On Aug 06 07:53 PM effiiciency wrote:

> Tongue-in-cheek, was Babe Ruth a great athlete?