Hedging Dividend Socks

[Pa(b)st Prime]

As we all know there's high yield opportunities galore in this environment. The flip side is price risk. Clipping 10% dividends is little comfort if the issue breaks 20%.

Options of course reflect a high yielders positive carry.

Throw some hedging ideas at me.

 

[nazzdack]

?...........at-the-money, shorter-dated, covered calls?

 

[Pa(b)st Prime]

Quote from nazzdack:

?...........at-the-money, shorter-dated, covered calls?

You got me thinking about something.

 

[Trader922]

Write some naked puts to get into them & then sell calls against them

Thats one that comes to mind. At least that would drop your break-even price on the entry.