SSF & Dividend strategy

[mccmatthew]

Could this be a possible way of obtaining a dividend on a stock and being short the SSF , so that you are neutral in position and still receiving a dividend:


For instance:

You would be long 1000 shares a week or so before ex dividend.

You would then short 10 SSF contracts.

= neutral (minus commissions)

When dividend is payed you close positions


Could anyone post any inherent problems with this strategy?

Thks,
Matt

 

[Htrader]

SSF prices already factor in dividends. This is why they often trade at a discount to the underlying stock.

 

[ArchAngel]

It's a sad fact that there's no free lunch

If it could be done, it would already be done by all the arb traders and you couldn't do it anyway.

 

[metooxx]

Maybe.

An arb trader ...

 

[rtharp]

Well now that you gave everybody the idea on Elitetrader the spread will narrow even more as competition increases.

 

[metooxx]

Quote from rtharp:

Well now that you gave everybody the idea on Elitetrader the spread will narrow even more as competition increases.

Takes a lot of capital and resources; not for the average trader ...

 

[cheeks]

Quote from metooxx:



Takes a lot of capital and resources; not for the average trader ...

Metooxx,

Are you a retail trader?

 

[hardrock375]

Quote from cheeks:



Metooxx,

Are you a retail trader?

Haha. :eek:

 

[cheeks]

Quote from hardrock375:



Haha. :eek:

What's so funny?

 

[metooxx]

Quote from cheeks:



Metooxx,

Are you a retail trader?

Not really; except for the textbook definition ...