Buy / Write

lylec305 said:
I’m at Cheetah ponpano right now. It’s not a big deal, your right . I do this type of trade all the time but this time I did not enter my cycle to accumulate stock with otm short put. I usually make more ...
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I'm not sure which is more pathetic...

Paying to see some titties shake at the Cheetah Club on Saturday night or posting replies to this board while being there. ROFL
 
lylec305 said:
I'm long GPC to collect dividend. Actually, my norm is to short put close to the money for assignment, which is another income stream. GPC Nov options have already passed, the setup is for buy/write. Notice the call strike price is otm for capital gains when assigned. It may not be assigned leaving room for another short call: repeat until assigned. I may short put for next cycle.
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Receiving a dividend does not provide Total Return (see sysdevel99's comment about ex-div share price adjustment).

Covered calls and short puts (same series) are synthetically equivalent and provide a similar return. Pending dividends are priced into the options. As Bobbybax suggested, "Just sell a naked put....half the commissions." Less B/A slippage as well.
 
spindr0 said:
Receiving a dividend does not provide Total Return (see sysdevel99's comment about ex-div share price adjustment).
Covered calls and short puts (same series) are synthetically equivalent and provide a similar return. Pending dividends are priced into the options. As Bobbybax suggested, "Just sell a naked put....half the commissions." Less B/A slippage as well.
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I see you don't understand my trade. Based on your comment, educating you would be a waste of time... LOL
 
lylec305 said:
I see you don't understand my trade. Based on your comment, educating you would be a waste of time... LOL
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Actually I'm not sure YOU do understand it. Like everyone said (knows) you'll make the same profit/have the same risk selling the 87.5 puts. You may get a better fill but for sure you'll pay less in commission. You "capturing" the dividend is a pipe dream - I know you're sold on this dividend aristocrat BS but have you ever though why people don't buy the stock the day before the dividend - capture the dividend and sell it right after ? It is because once the dividend gets paid your stock will drop the same amount. Anyway - keep trading and good luck.
 
sysdevel99 said:
Actually I'm not sure YOU do understand it. Like everyone said (knows) you'll make the same profit/have the same risk selling the 87.5 puts. You may get a better fill but for sure you'll pay less in commission. You "capturing" the dividend is a pipe dream - I know you're sold on this dividend aristocrat BS but have you ever though why people don't buy the stock the day before the dividend - capture the dividend and sell it right after ? It is because once the dividend gets paid your stock will drop the same amount. Anyway - keep trading and good luck.
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I guess you don't understand bid/ask. Tell the institutions that place their trades your story. Analyze my trade and setup, notice the fill date is almost 3 weeks before ex-dividend date. Check the current price of the stock compared to the price i paid, notice it's up almost a buck. But a buck is peanuts to you. I guess it is if you're trading 1 contract.
i could have close out my trade last friday and made $785 profit. And you would be still short put. Which put were you planning on shorting, each tick is $2.5. You may need to short ITM put to match my premium and capital gains. If stock is flat, assignment at a loss is s biatch. You'll never get it, go ahead and trade your way, and i will trade mine. I am not here to convince anyone, but you certainly are. I'm just posting a simple buy/write. If you have a better mouse trap; post your live trade and we'll compare results.
InstiOwn.jpg

GPC is beyond dividend aristocrat. To make the list a company has never reduced, and has actually increased it's dividend for more than 25 years.
 
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sysdevel99 said:
Actually I'm not sure YOU do understand it. Like everyone said (knows) you'll make the same profit/have the same risk selling the 87.5 puts. You may get a better fill but for sure you'll pay less in commission. You "capturing" the dividend is a pipe dream - I know you're sold on this dividend aristocrat BS but have you ever though why people don't buy the stock the day before the dividend - capture the dividend and sell it right after ? It is because once the dividend gets paid your stock will drop the same amount. Anyway - keep trading and good luck.
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Unlike European options and non-dividend paying underlyings, a short put and buywrite with a dividend paying stock and an American option are not strictly equivalent. You can construct scenarios where one earns more than the other.
 
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