<p>I’m glad I got rid of FB. I don’t own GOOG, too big of a stock, but when I was selected mutual funds. I made sure it was in the top 10 holdings. I’m afraid AMZN & EBAY would be most likely choices. However I think AAPL will go up. My predictions.</p>
<p>Not me, I own fb 1/15 50 - 55 call spreads.</p>
<p>These spreads really worked well. </p>
<p>
:)) Buy writes don't actually work that way...definitely not with SPY. I mean, the "max loss" assumes that the stock tanks to -0-, all while you are sitting on your hands instead of buying back your call. I have a feeling that if SPY was plummeting that far and that fast, we'd probably all have bigger problems to worry about than a single holding in our investment accounts. </p>
<p>Unlike options, stocks do not “expire” so you are unlikely to ever go to -0- on your investment. I think that’s why I am more comfortable being long with the stocks-- with long options I have this fear that I will get ill and be in the hospital, temporarily in a coma, and no one in my family will realize that they need to sell those options before they expire. </p>
<p>But then again, if you want to limit loss … why not a simple call spread? </p>
<p>Calmom, lol, that’s the least of your worries if you are in a coma. Your stock options become worthless.</p>
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<p>I think I may have asked this earlier, but can’t you put in a limit order to close or roll the positions outside of market hours? If I was in your position I’d just be putting in a best-case-scenario order over the weekend, and then if it hadn’t closed by Thursday, on Thursday night I’d adjust the order to a level that would make sure it would be filled, perhaps taking the risk of placing it as a market order. (I mean, how bad can things get overnight in an index fund? – it’s not as if the market order on Friday morning is going to be that far off of the numbers you are seeing in after-hours trading the night before. </p>
<p>They’re 10/3 puts. I’ll keep rolling them out until I like the price and get the stock or buy them back and sell puts in a roughly equivalent priced stock with the same volatility.</p>
<p>The Monday comment was in reference to dstark’s dividend comment on spy which I need to unload before ex div this week</p>
<p>The software program came up with the maximum loss. I didn’t come up with that loss. 
I didnt do the trade yet because the spyders didn’t look that good today and the trade doesn’t lose much by waiting for the fed meeting next week to occur. </p>
<p>This is a dividend play. A call spread is fine. </p>
<p>You are betting you aren’t getting assigned on your short side of the spread. </p>
<p>You have to exercise the long calls on Thursday to get the dividend on Friday. Call or contact the brokerage firm to confirm. After exercising, you are still going to end up long stock/short calls for 1 day or you are going to be assigned before trading on Friday which means no dividend on the trade and the trade is over. The dividend is most, if not all of the profit. </p>
<p>If a trader forgets to exercise, the trader doesn’t get the dividend.</p>
<p>If you get assigned on your short side of the spread,
You pay the dividend if you don’t exercise the long side of the spread. It’s an .80 to 1.00 loss if the trader doesn’t exercise. That is a big loss on this kind of trade. </p>
<p>The way you can cover some of the risk is by buying otm money puts. The risk is very short term. </p>
<p>Do the option books talk about reversals and conversions and how to price them? </p>
<p>That’s crazy about these dividend rules. If you have lots of shares, it is a pain to have to deal with it.</p>
<p>Got a quick question to the professionals. </p>
<p>If I buy an annuity, after the agreed period of time, do I get my principle back? </p>
<p>I am trying to figure out if it is better to buy high dividend stocks or annuity here. </p>
<p>For over 3 years, I have been fair aggressively buying MO in my IRA accounts. If it continues to grow the dividends at 8% or higher per year. 5000 shares could yield $20,000 a year of dividend about 10 years from now. That could double again in another 10 years. Of course, that is not guaranteed. </p>
<p>An annuity, on the other hand, is guaranteed. Thus my question. </p>
<p>Use those dividends to pay back Stanford for claiming to be dirt poor.</p>
<p>Looks like your financial situation took a huge turn for the better, dadII. You can contribute catch up money to your TSA accounts. Why not do that?</p>
<p>It must feel so much better to have extra money for a change.</p>
<p>Didn’t you mention you had a private banker? They might be able to answer your question. Many posters here aren’t as fortunate to qualify for private banking services.</p>
<p>DrGoogle, if you own the stock or etf, before the ex dividend date and don’t sell or don’t sell until the ex div date, you get the dividend. That is simple.</p>
<p>Option prices are affected by dividends and that makes options more complicated. </p>
<p>Nobody should invest or trade what they don’t understand so if a person doesn’t understand annuities, he or she should not buy annuities.</p>
<p>There are many kinds of annuities, but generally you are giving up some or all of your principal for an income stream.</p>
<p>If you get the principal back, the annuity is either over or the income stream is much lower.</p>
<p>I think the problem with options and dividends is that an ex-dividend date increases probability of a short call being exercised, particularly when it is in-the-money, or when the quarterly dividend is significant. It can also complicate practical considerations as to when to open or close a position – obviously a change in value of the stock or option can wipe out whatever benefit one would get from a dividend anyway. In theory, the stock value is reduced on ex dividend day by the exact amount of the dividend, but I think that for most stocks, market movements tend to outweigh that impact. That is, for example, AT&T pays a 46-cent dividend. — so if it trading at 35 the day before it goes ex-dividend, then it should open at 34.54 on ex-dividend day. But this past Friday (NOT an ex-div day, just the day that is easiest for me to call up data) – the price of T moved between a low of 34.36 and a high of 34.91 – a 55 cent variation, bigger than the dividend. So a nimble trader could probably make more money in a single day of trading than the quarterly dividend. </p>
<p>I think it’s important to be aware of the ex-div dates with option trading to avoid unanticipated early assignment - but I think it’s a more important factor for traders and investors in the underlying stock, simply because on a higher dividend paying stock, it’s an added benefit for those who enter trades shortly before the ex dividend dates… It might be a lot more important for option planning when the ex-div date coincides with option expiration – for example, SPY goes ex-dividend on Sept. 19. So one can anticipate that SPY will open about a dollar lower on Friday morning. </p>
<p>If I were DocT, however, I’d still just go ahead and figure out what I want to do and simply place an appropriate market or limit order earlier in the week - no point driving ourselves nuts trying to hold out for the very best possible moment to make a trade. There’s an negative value to attach to emotional stress as well-- it may not show up on a spreadsheet, but I think it’s real enough that it’s worth taking a minor financial hit early in the week. Whatever DocT loses by a premature trade – if in hindsight it turns out to be a loss - he can make up later when his court case is over and he has time to focus his undivided attention on his investing. At least that’s how I look at things. It’s not as if he’s guaranteed a better outcome if he holds off until later … all he gets by waiting is more certainty - but the market conditions can get worse for his trade as the week goes on rather than better, in any case. </p>
<p>Sorry…</p>
<p>I find this interesting. SPY closed at 1;00 at 199.13 which means the 199 calls are an automatic exercise unless the trader is proactive and says no exercise. </p>
<p>After hours, spy closed below 199. Because spy closed below 199 after hours, are the calls no longer automatically exercised and the puts are? I cant see the time and sales so I don’t know when spy dipped below 199. There is no point in exercising the 199 calls if you can buy the stock below 199…unless the exercise is already done. </p>
<p>I thought 2;30 was the cutoff where you have to decide to exercise or not. Now I can’t remember. :)</p>
<p>if you are short the 199 calls or puts, you are in limbo. </p>
<p>Neither can I. It’s a real bummer growing old. I spent the week listening to people getting tripped up on their testimony on events that happened 10 years ago. I can’t remember what I did last week. Also if something happened to me, I’m not certain if anybody could figure out what I was doing in my accounts.</p>
<p>Remembering 10 years ago? Oh boy!!!</p>
<p>One thing I do find interesting about the mind… I was an option market maker for a long time, but that is many years ago. My memory is very good about those years.</p>
<p>I was a hft for 5 years ending two years ago, and those memories are fading. Must be something about memory when a person is in his 30’s and a person is in his 50’s. ( I did write some stuff in a notebook because my memory isnt as good. I dont think I will need that notebook).</p>
<p>Yeah… I understand your last comment too. I told my wife to contact the cpa if something happens to me. She has the email of my lawyer. My wife is extremely competent but not that interested. I told my wife if I die to take some cash and buy some spys. I dont think she paid attention to that either. </p>
<p>On the plus side, if we die, we wont know what is going on. :)</p>
<p>I agree that parts of growing old are a bummer. I do feel more relaxed in some areas. As we age, we do have a better understanding of life. The rat race is not appealing…</p>