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Alpine Total Dynamic Dividend F Message Board

  • bluebuick2003 bluebuick2003 May 17, 2010 11:58 PM Flag

    bought BOE today

    i bought BOE today just below 16.70. NAV at the end of the day was 17.61. ex div was just a couple days ago. look at the volume before ex div, btwn 2x and 4x normal. now those buyers are exiting so oversold a bit. look the chart against XBOEX, normally trades a premium.

    planning to do same thing for ETO once ex div day passes (next day or two). 10% discount to NAV on this one.

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    • From what I've read in some of the Eaton Vance fund reports, they manage their call-writing funds the way you say it should be done. They usually buy back the call option rather than let the stock be called away, and they don't write calls on 100% of the portfolio. Their fact sheets often say they write the first tranche out of the money.

      A few months ago when the market was more bullish, I read that the call-writing funds were not bringing in as much income due to lack of volatility in the markets and options premiums coming down. But now that volatility is back, call-writing funds may do better.

    • i got it. that fund is most likely just like PBP that i noted i do not like. i believe they use a very "rigid" program on their call writing. they never buy a call back at a loss plus they cover 100% of the position. that is almost a death sentence.

      alot of people are "against" calls because they believe it limits your upside. if you manage the calls properly, you don't really get capped unless the market has a super surge (say more than 5% a month).

      as an example. let's say i bought SPY at 110 and wrote a 115 call one month out and collected 3 pts. then the SPY soars to 118 and the call value is now around 6. buy back the call for 3 pt loss (but remember you are sitting on an 8pt gain). then go out three months and write a 118 call and you'd probably collect 6 for that. if SPY goes to 125, same drill. if SPY goes back to 110, you took a 3 pt loss on your buyback but you then collected 6 pts so 3 pt profit.

      do not invest in some kind of "automated" call writing. you'll be in the depths of hell.

    • Good deal on BOE. Between just going ex-dividend and perhaps due to being an international fund, it's down much more than usual. I've noticed that some other international funds (NAI, BGY) are really cheap right now also.

      • 1 Reply to gatesofstone
      • gates,

        as far as i know, BOE is 50% US exposure. before it merged with BWC and BFD, i think it was more "international". maybe the blending of the three brought it more US based positions.

        i like the covered calls aspect, a good hedge. i imagine the mgrs are looking at buying some calls back right now. i don't like PBP (covered calls on SPY), i don't think that one every buys calls back. when you play with covered calls, you need active mgmt. buy them back at a gain or buy them back at a loss but immediately write the same number of calls further out on exp.

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