Hmmmm, from the post of today which I questioned:
" I just sold $11 Jan 15 puts."
From your response to my question:
"The $11 strike price was where I felt a sweet spot was...."
Only problems are:
1. There is no such thing as a Jan 2015 strike price of $11....the strikes go from 10 to 12.
2. None of the months with an 11 strike price had any contracts traded today.
No amount of explanation or correction will change my conclusion.
Did ya tell him NRF isn't a mreit any more, either by assets or income?
Anybody else with NRF on margin? If yes, tell us the name of your broker and the current maintenance percentage.
Check out Fidelity....7.95 commissions, negotiable margin rates depending on how big the accounts and number of trades per year, great executions, great recordkeeping, a "performance report" which shows each account and all accounts together....in dollar and percentage terms how they have done ytd, one, three, five, 10 years and since inception....separating dividends & interest from market change and cash in or out. Great report to see how you compare to major averages. Free bill paying....you state the date you want the payment received by the vendor and Fidelity guarantees it. Easy electronic transfers to/from bank accounts. If your household accounts are big enough (I think more than 1 million), you get a "private" customer team with a special phone number, instant messaging to team. Just a great broker with its administrative act together.
Hmmm, my original post disappeared and it did not have any bad words in it for the yahoo speech police.
Once upon a time Fidelity had 100% margin on Good when it was selling for 18.00, so I called Fidelity and asked why. The first answer started, "Probably because...." before I interrupted saying I wanted a definitive answer, not probably. They called back and said there was no current reason for 100%, so they were changing it to their normal 30% for maintenance (vs 50% for purchase).
Later on they added 5% to every reit in the account calling it an industry adjustment.
Fidelity also surcharges very large positions. NRF, by far my largest gets 10% and SUI, second largest gets 5% for size.
So my margin on nrf is 45% (30 + 5 industry + 10 for concentration)
SUI is 30 + 5 + 5 + 40% total.
GOOD and every other reit is 30 + 5 industry = 35%.
Fidelity charges 100% on any stock priced under 3.00 and 3.00 per share if that is more than 30% of the price. For example, FTR priced at around 5.60 has 3.00 for margin maintenance.
I suggest you call Wells and ask why 100%, and don't take "probably" for an answer. I suspect they stuck 100% on NRF way back when and "forgot" to review it because nobody asked them.
Fidelity is showing 1.70-2.00 bid-ask on the jan 2015 puts at 15. It also shows 2 contracts traded today.
Where did you get $11 from?
IMO, if you are trading options in 2 contract lots, you're nuts because the spread and commissions will eat you alive.
BTW, if Wells won't take 100% off NRF and you do not want to move to another broker like fidelity, tell Wells to leave NRF in your cash account (type 1 in broker lingo) and move other securities to margin (type 2). Then Wells will not be able to loan your NRF shares to a short without your express permission.
You are young enough to strike out a couple of times and still retire rich. Just keep on living beneath your means and save for retirement (not a Corvette) from every paycheck.
I don't buy calls much at all.....maybe once a year as a dice roll.....because they are a wasting asset. If things don't work on the timetable you bet on, it's premium down the drain. I'd rather be long collecting a dividend which gives me lotsa time to wait.
10 o'clock smackdown was a big one. Started at 9:55 at 15.37 to 14.89 17 minutes later. One minute over 800,000 shares. A couple of minutes later over 600,000 shares. I doubt these big minutes are mostly shorts.
A big guy sitting on huge gains got scared the gains were running away....thus the fear dump....which will shake the retail tree.
Just gotta wait it out. Nothing wrong inside nrf besides huge one-time cost of exchangeable notes. Growth continues. Got 12% on leveraged equity waiting to close on 1 billion of new healthcare properties. Waiting for sec to declare effective registration statement for nsam. Working on 2 billion nontraded offering with rxr. Growth continues. Just gotta be patient and shake off fear.
My guess is earnings report 5/2, three weeks from next Friday. Should be lotsa news in that.
The computer programs are now sniffing for a bottom. If they smell bottom, the buy programs are triggered. If they don't, we'll see a rollover into another down day for the major averages.
I think the same is going on with nrf.....maybe even by humans. If the bottom is felt, smelled, detected, the buying gets into gear. Otherwise, another drop until the sell momo is finished.
As of 3/21, 201.3 million collected vs 173.4 million thru 3/4 in supplement 19 for 27.9 million in 17 days......1.641 million per day. Very nice per day for a change.
NRF presentation assumes 800 million collected in 2014. While another 10 million will give Healthcare 100 million in 1Q, Income 2 is way short with 27.9 million at 12/31/13 (per nsam prospectus) and 76.2 million thru 4/2 or 48.3 million 2 business days into 2Q.
Despite 1Q being short of 1/4 of 800 million in 1Q, the rate of collection on these nontraded reits accelerates as they get bigger. NRF did not release estimate by quarter, so I can't tell if 1Q collections meet or exceed their goal for the Q. Maybe they will comment on actual vs expectations in earnings press release or at CC.
Read my example of how it's done as many times as you have to until you get it right.
I am not going to repeat the same thing over and over because you can't or won't understand and accept the fact and method.
I don't know why. NRF has not announced anything bad. Momo stocks have been selling off. Anybody want to argue nrf has not been a momo stock since the spin announced?
CAD is the best indicator for nrf simply because gaap net income, ffo and affo are horrible indicators.
NRF's financial statements have been garbaged-up by gaap for the vies, which they are deconsolidating.
Since when do you make a profit when your debts, which you are required to pay at face, decline in value? That's gaap.
NSAM will take over the management of the vies. If they are deemed to control or are the primary beneficiary, then the junk shifts to nsam's consolidated statements. In fact, nsam may have to consolidate nrf, like aamc with it's creator. If so, they had better disclose 3 columns.....nrf....vies....and nsam stand alone.
Asset-light, not equity dependent for growth, gaap net income may be the best indicator for nsam. We'll see. But as I've posted here over and over, gaap is cr@p, cash is king. It's much harder to fudge cash than net income..
ARR did pay roc dividends in 2013, per Fidelity's 1099 to me. I can't tell you the percentage because my holdings varied during the year and I got some pay in lieu on arr.
If it is not on company's website, email investor relations with the question. If your broker can't or won't give you accurate tax information, get a broker who will. I don't know if Fidelity does business in Canada. If they do, check them out. I would expect service similar to what I get in the US.....superior.
Last, and you would probably have to pay for it, Commerce Clearing House, a publisher of tax and financial data, had a publication called Capital Changes Reporter. It reports the changes in capital structure of every public company from inception to date. It also has a dividends section which reports the tax status of every dividend from the same companies.
I made a comment on the NYMT thread that no internally managed reit would make a common offering unless it was accretive. The same cannot be said for an externally managed reit, which NRF is about to become.
NSAM has a sweetheart management contract with NRF. Other than the incentive fees, NSAM makes more money due to any equity issuance whether or not that issuance is accretive to nrf shareholders. The issuance can be dilutive but nsam still gets the same incremental fees. Thus, the ownership interests of the bigshots bears watching. NRF last week filed with the sec incentive compensation plans for nsam which are similar to nrf's plans.
At the spin, nrf bigshots become employees of nsam. Their vested and non-vested ownership interests in nrf convert to ownership interests in nsam the same as common stock of nrf. At the spin, their ownership interests in both companies are equal, just like all common stockholders..
At the beginning of post spin operations, it makes no difference if a dollar is taken out of the left pocket (nrf) to be put in the right pocket (nsam), because each shareholder owns both pockets in the same proportion as pre spin.
Yeah, nsam will be a c corp paying taxes but it will also trade at a higher multiple of cad than nrf.
BUT, as the equity compensation giveaways continue over time, the bigshot insiders will own a greater proportion of nsam. It starts with them owning, say 4% with outsiders owning 96%. But more shares given to the insiders means 5-95, then 6-94, then 7-93 and so on while ownership of nrf stays 4-96. Now it does make a difference if a dollar is taken out of the left pocket to be transferred to the right pocket.
In sum, as the insiders proportionately own a greater percentage of nsam than nrf, the likelihood of offerings unfavorable to nrf shareholders increases, imo, Keep this in mind if you are thinking of selling other than equally post spin.
BTW, the idea of merging separate lots into one lot comes from recollection of a deal I worked on over 25 years ago. The tax expert on that job mentioned IRS regulations on lot by lot basis adjustments for corporate stock. He referred to IRS regulations he called "old and cold". I think the regulations he referred to pre-dated electronic record-keeping for stock ownership. In other words, the regulations he referred to were written when paper stock certificates were the norm and street name holding by brokers was relatively new.
If these regulations have not been amended in the past 40 years or so, they will contemplate paper stock certificates, so my idea might be addressed. I just don't know the answer.
"If cost basis adjustments must be done on a lot-by-lot basis, there isn't much I can do about it. "
Here is an idea. I just don't know if it will work. You will have to find and read the IRS regulations yourself or pay a CPA for a definitive answer.
I know for a fact IRS requires adjusted basis of stock in a corporation on a lot by lot basis. Let's say you bought 1,000 shares for 3.00 per share (3,000 cost) then last year another 4,000 shares at 8.00 per share (32,000 cost). Your brokerage account shows each lot separately. Your weighted average cost is 7.00 (35,000/5,000 shares).
Any adjustments to basis must be on a lot by lot basis, including roc dividends, the reverse split and the spinoff allocation.
Suppose you ask your broker to issue you one stock certificate for 5,000 shares. Do separate lots then merge into one lot for IRS purposes????? If yes, you can solve your problem without resorting to the "final solution". I do not know the answer.
Yeah, it costs 50 bucks or so to get a paper stock certificate, then some paperwork to get the certificate back into a brokerage account. Also, if you do the round trip too fast, IRS can attack the transactions as a sham and ignore it. BUT, if the regulations allow merger of separate stock lots into one lot via a consolidated stock certificate, you can solve your problem with enough high basis nrf.
"Can you point me to something that I can do a Google Search on (e.g. a few key words)?"
Handgun, very tall bridge, gentle poison, strong sleeping pills. I can rent you an AR-15 with one hollow point in it or a 12 gauge with 00 buck....your choice for $299 per day. Guaranteed to get you a step-up in basis.
That's right, a return of capital dividend which exceeds the basis of the underlying stock is treated as selling the stock which has a zero basis. If you have held the stock for more than a year, roc distributions in excess of basis = a long term capital gain, which is better than a nonqualifying dividend. The calculation is on a lot by lot basis.
I expect all nrf 2014 dividends will be roc. After I read the 10-K I might have a feel for 2015.
In any event, if you are running out of basis in nrf, you will know in advance. There is a guaranteed solution but you can only exercise this tax option once in a lifetime.