I think it does stand the test. How do you know that isn't one of the reasons stocks fluctuate? There may be a thousand reasons, but the options vesting is such a small %, you can't see the exact effect. It's not that the stock is worth less, it's that the company is worth less whenever cash goes out the door without corresponding benefit (inventory, good-will, service exchange, etc...)
Except your tax consequences are higher. Those of us who are in at $2 aren't in the mood to pay taxes on $3.50 worth of gain (70 cents in taxes) to 'profit' on a 50 cent swing. Sure, if you're in at $6, it might make sense (although you'd have a 'wash sale', and not be able write off any losses). Hey, it's your money, do what you want.
You obviously don't know how the market works. No one gets paid a div if they sell before ex-div. But they do pay tax on any capital gain. For most, the tax on the div would be less. If you're in a stock for the div, you shouldn't sell, unless you think the fundamentals have changed. If you're in it for capital gain, you shouldn't be in MLPs, REITs, etc... If you're an investor, you'll have one strategy. If you're a trader, you'll have another.
Look, I don't think you can be upset about Class B. My understanding is that they basically have 'preferred' status, which means they get paid. Sure, they could suspend them, but their div accumulates, and that would just hurt the common holders. Do I have that right? Anyone else have insight here?
Yes, you're a day late, and a dollar short (first time I could ever say that with confidence!). Of course it doesn't make sense at this point. I'm working on BUY TO CLOSE, to limit my loss at this point. But even if I get put the stock, it's not so bad, and the stock could recover in the next year or so.
Like gambling in Vegas, most people lose buying calls. Of course, you can lose just as much selling puts! Yes, you have to own before the close on the ex-date.
Mystery solved! Now it makes perfect sense. I'm sure to be put the shares now! No worries, I still have confidence in the long-term prospects of the company.
Yes, the buyer the right (but not the obligation) to sell the shares at $5 (as of May 20). I can't see why they would do that, so I assume I'll just keep the premium!
The May $5 puts are still selling for between .40 & .60. No difference (although open interest seems higher...). At least there was no drop in the div, and the shares are up.
This shouldn't have anything to do with it, but it may (from a perceptual standpoint). But if so, that only accounts for a portion of it. The options should be priced to allow entry at 4.75, not 4.50.
At what price do you want to get in? May$5 puts are going selling for 1.30, which puts you in at 3.70. If you get up early on Monday, you might be able to sell a few May $2.50 contracts for as little as 0.05, putting you in at 2.45 (there is still open interest, by those who mistakenly? have set up to buy the puts GTC - mistake, but you can still capitalize on the mistakes of others, and get in cheap!)
If someone offers you a deal, but tells you you could lose your money, and you voluntarily give them your money, are they criminals to profit from your naivete? Or is it more likely you're a sucker? One is posting every minute, I'm told...
Got a puzzler for you. Why are people buying SDLP May $5 puts? The stock is over $5, and I've sold a bunch of contracts for up to .50 this morning. If you're a bear on this stock, you could short it, buy ITM puts, or just freakin' wait until it drops. Why are idiots buying these puts?
I guess shorts have to cover, and those buying puts don't, right? Doesn't the buyer have the 'right' to buy, but not the obligation? The only other explanation I can come up with is that these trades went thru because a number of buyers had GTC orders, and hadn't yet modified their orders. Great deal for me, too bad for them. Thoughts?
Got it. I'm trying to figure out why they are buying, It doesn't make sense to me. Of course, I'll sell to any idiot who wants to give me their cash, but why are they doing it? What is their motivation? Is it less risky to short a stock in this manner, rather than shorting it directly? I don't short stocks, so I don't get it.
I didn't buy puts. I am selling puts. I'm wondering which idiots out there are actually buying puts, especially those that are so far in-the-money that forces them to sell the stock below market price.