Advanced options trading dividends


But if you purchase it on the ex-dividend date, you will not get the dividend. Important legal information about the email you will be sending. By using this service, you agree to input your real email address and only send it to people you know. advannced It is a violation of law in some jurisdictions to falsely identify yourself in an email.

There are a number of strategies available to investors that use option contracts to generate attractive levels of income. Two strategies in particular that have become asvanced with individual investors are selling covered calls and selling puts. These strategies can be implemented through traditional brokerage accounts, as well as through qualified accounts such as IRAs.Covered Calls: Investors purchase shares of stock and then sSome stocks pay generous dividends every quarter.

You qualify for the dividend ifyou are holding on the shares before the ex-dividenddate.Many people have triedto buy the the shares just before the ex-dividend date simply to collect the dividendpayout only to find that the traeing price drop by at least the amount of the dividendafter the ex-dividend date, effectively nullifying the earnings from the dividenditself.There is, however, a way to go about collecting the dividends using options.

On the day before ex-dividend date, you can do a covered write by buying the dividendpaying stock while simultaneously writing an equivalent number ofdeep in-the-moneycall options on it. The call strike price plus the premiums received should be equalor greater than the current stock price.On advanced options trading dividends date, assuming no assignmenttakes place, you will have qualified for the dividend. While the underlyBetter Together. Never miss a trending story with yahoo.comas your homepage.

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Advanced options trading dividends

Advanced options trading dividends