I may be buying at 35, depending on the market in Sept. Have considered KO, but never bought shares, only sold puts and made profit. KO and tobacco such as LO need to change their businesses significantly, to be safe dividend stocks.
Why would you even post on this board on trading strategies? I trade AAPL and I hereby leave this board.
That is a good set of thoughts. I will start selling weekly puts here. Might as well exercise them buying shares before ex-div.
How do we figure a fair price for KO? When bond yields become more attractive, people start abandoning dividend stocks, especially, for a low-yield div like KO...
Went all in at 420.8 today on the first upticks and sold at 429-430. That's 20K shares! Was very nervous, but it went well. Will close all option positions tomorrow. I am done with AAPL till closer to the next conf call. Wish luck to all on this board.
When Hon Hai news hit the wires, I bought/wrote calls for AAPL right away. Sure enough, the orders got filled. Now I am covered until 400, with a 15c/share profit. Do not think AAPL will fall below 400 this week. But I will get rid of the shares by Friday. Will buy at 375 if it gets there. There are better trades.
OK, exited AAPL this morning. On 20K shares, made 0.74/share counting dividend. Not too bad for a 2.5-day trade; I was hoping to make 2/share, but it did not work for some reason. I guess the Black–Scholes model does not acccount for the lower volume of calls after the dividend. Certainly worth repeating with other high-volume stocks.
Got my calls for 450 exercised a few moments ago. Someone took my 3K shares. Good riddance. The good thing is, I bought/wrote these on margin today for a small profit, and it still counts as an intraday play. I do not pay for margin. I love this! I am holding 20K shares/200 January 400 calls and will be getting rid of those as soon as there is any uptick tomorrow.
Jan 18 400 2014 calls sell exceptionally well and are liquid. Bought 20K shares/sold 200 calls in the last few days for dividend. Plan on unloading tomorrow. You lose about $1 on calls if shareprice goes down, but gain $3 on dividend. If you hold on to the shares a bit longer, time premium goes down and you may not lose on calls.
I always try to do this, at least once weekly. Place buy/write orders deep in the money. In fact, since AAPL started falling, it was my only strategy with this stock, beside selling puts. The worst thing that can happen the order does not get executed. With AAPL, it did. Less volatile stocks will not work this way, you'd be paying to do buy/write. The idea is to have a large trade volume, without stressing the margin. I will have the shares called on Saturday, and all is well.
Right. Not making REAL money (only 2 cents per share/call), but trade volume goes up, which is important for me. Normally you can't buy/write so deep in the money for profit, even minimal, if the shareprice goes up. That is what I am trying to say.
This is the good advice. I use buy/write strategy always. It allows me to formally increase the volume of trades (those who use MTM will understand), yet the risk is minimal if any. As far as AAPL, I do not see a reason going long except prior to ex-div day. Also, do not expect much excitement out of the WWDC event. That is, as far as shareprice goes.
Best of luck to you. You made a right decision. If a stock does not let you sleep at night, sell it. It is much healthier. AAPL is a stock to avoid if you are an investor, unless you have a very long time horizon and you are willing to watch it and understand what MM are doing. AAPL is a hazardous stock, let's face it. I am a trader, yet I do not see me placing large bets on this stock anymore. There are much better alternatives.
Thanks, that is a useful post. I think the stock can drop by the amount of dividend on ex-div date, i.e., about a $1/share. The question then is, with dividends delivered on a yearly basis, how do you make money in between dividends? The stock has not been growing, really.