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Strategies & Market Trends : Dividend investing for retirement
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To: robert b furman who wrote (30371)1/15/2019 5:35:04 PM
From: spindr00  Read Replies (3) of 34328
 
Bob,

I think that we may have two topics intertwining in our conversations...

"In your example of T there is a loss in the past year of $5.61. That is a function of the strike price you sold the put at."

That example did not involve options, merely buying the shares and holding them for the past year.

"If I can buy the stock at that low price, then the dividend is usually a return of company earnings and not a return of my capital."

Share price appreciation is where profit comes from, not from receiving dividends.

There are two aspects to dividends, the corporate side (return of company earnings) and what happens in your brokerage account on the ex-dividend date. Rather than go through a long explanation, I'd just ask, are you aware that the stock exchanges reduce share price by the amount of the dividend on the ex-dividend date and that because of that, dividends do not produce Total Return?

I'm not a fan of selling one LEAP options because you get less premium per day and a lower ROI. One could make the case that the total premium is larger and provides more downside protection but that doesn't sway me enough to do it. The sale of puts with over one year until expiration does not get LTCG treatment if they expire unexercised (short-term gains).
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