Then buy the stock, not an option: "holding my option till feb 21 i dont care .stock looks cheap!!!!!!!!!!"
Do a variable volatility option model on the options to see if the option is cheap. And good luck estimating the drift function for volatility.
"But I assume KMR will rise or fall independent of the other pipelines in the group, whereas KMI is tied to them. Is that right?"
No. KMR trades at a discount to KMP. KMR/KMP track the stock market, crude oil prices, interest rates (because they are bond surrogates). The KMR discount to KMP tends to increase when KMP/Stock Market/Crude oil prices go down and tends to decrease when KMP/Stock Market/Crude oil prices go up.
KMR is touted as giving no tax headaches (very minor in my opinion) and being able to manage your taxes by timing your sales. Actually, KMP allows you to manage your taxes by timing your sales also.
Anyway, you calculate the "yield" on KMR by annualizing the KMP cash distribution and dividing it by the KMR price. KMR now "yields" 7.32% and KMP "only" yields 6.86%. I expect both yields to go higher and therefore the prices of these stocks to go lower. That said, KMR at 7% is pretty attractive to me.
I trade KMP to make money for a new iPhone and own KMR as a core investment.
" Here's hoping they go up and stay up." Unlikely. 10-year Treasury yields are widely projected to go up to 3.50 - 3.75% this year. That will keep pressure on all yield stocks. But part of the high prices for yield stocks reflects an artificially induced (by QE) low 10-year Treasury yield of under 1.50%.
"According to "Key Statistics" the dividend is 4.3%," The dividend is currently $0.41 paid quarterly. The current yield was 4.3% but is now 4.77%. Current yield flucuates based on the price of the stock and changing dividend.
Dividend is up from $0.40 two dividends ago and $0.38 three dividends ago. Growing the dividend is a plus, but not enough of a plus to keep the price of the stock up.
Charting the current yield, it looks like KMI is headed back to yield 5%. ( $0.41 * 4 ) / 0.05 = $32.80. Was below there already this month, so that price seems very doable to me. I don't own any KMI now (the dividend stocks I do own are all down though) but looking to buy. I also own KMR as a core holding.
"CTL would need to trade at $28.72 ($0.54*4/0.0752)" to yield 7.520% and here we are.
CTL has been going down for almost six months but with a couple of significant reversals. I think it is headed back to an 8% yield which means more downside.
Its been 5-9 days to cover for many months. These shorts are arb positions against options and other complex positions. Was as high as 12 days last July and we are down from there, not up. Grasping at straws here, grasping at straws.
Incorrect. Even with a stock distribution you will see KMR decline by about the amount of market value of the distribution on the open of KMR on ex-dividend day. You can see this on Google Finance in their very short term graphs. KMR is then free to do what ever market forces dictate for the rest of the day. No stock dividend, by itself increases the market value of a stock, that is caused by increasing earnings/cashflow/growth/multiple expansion.
Like many stocks that have a high dividend/distribution/stock dividend yield, ex-dividend day usually begins a decline for several days to several weeks.
liza is correct. KMP pays a distribution. If you think it is a dividend, you probably should not be in KMP, you will be getting a K-1 as SNL would say "what dat?" KMI does pay a qualified dividend.
Sumflow is wrong here:
"Unlikely anything Yahoo says about the LLC is correct. Both Kmp and Kmr get the same income and have the same call on assets, but Yahoo shows Kmr as 0% yield."
This is all wrong.
KMP is a Master Limited Partnership and reports via a K-1, i.e. a partnership tax form.
KMR is a "Domestic For-Profit Corporation" and an LLC and controls KMP.
Read the blurb that describes KMR when you bring up a KMR as a quote on Google Finance.
Got to the Kinder Morgan website for
Kinder Morgan Management, LLC (NYSE: KMR) is a limited partner in and manages and controls the business and affairs of Kinder Morgan Energy Partners (NYSE: KMP),
Sumflow must maintain that Yahoo Finance, Google Finance and Kinder Morgan all do not know what they are talking about, but sumflow does. Not likely. Sumflow has a keyboard and little else.
Question: How do I figure the cost basis of stock that has split, giving me more of the same stock, so I can figure my capital gain (or loss) on the sale of the stock?
To get the IRS answer to this question.
the answer is along the lines of The PER SHARE basis is determined by dividing the adjusted basis of the old stock by the number of shares of old and new stock.
No, no, no. Your original cost is $7000 (not $700). The cost basis per share is initially $7000/100 or $70. Then $7,000/101 is the PER SHARE cost basis, then $7000/101.1 is the new cost basis PER SHARE. Original purchase date is the purchase date for the original shares and all shares received as stock dividends. The stock dividend is treated as a stock split for tax purposes. Not all stock splits are 1:2 or 20:1, some are very minor like KMR.
Google "Dividends and Splits - KMR" to see two examples of the treatment of KMR distributions. This is from the Kinder Morgan website. The two examples are at the bottom of the page.
KMR stock distributions are treated like a stock split. They add to the total shares held, the original cost basis is the same, the original buy date of the original shares is the date for capital gains for the shares received as a stock dividend.
The cost is the original cost basis of the shares you purchased. The stock you receive is treated like a stock split and have the same purchase date as your original shares. You can adjust the purchase date (they were never purchased, they were received) to your original purchase date at Fidelity. Call Fidelity and they will explain how.
$40 exercise price, $50 stock price, warrant price less than $10, you exercise; warrant price more than $10 you sell the warrant. Won't go to parity $10 in this example, until close to the expiration date of the warrant.
Exact opposite with me. I had to direct them to reinvest the shares just like it was a cash dividend because they were selling out the fractional shares.