Dividend Trading/ Upcoming ex-dividend dates Message Board

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Strategies & Market Trends : Dividend Trading/ Upcoming ex-dividend dates

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To: PitBull who wrote (9)	5/11/1998 5:55:00 PM
From: Bill J. Landis	of 16

Dividend plays ... a very interested idea I hadn't considered before. How exactly does it work? Do you just find a stock that is paying a (preferably large) dividend soon, buy so you can get the dividend, and then sell immediately or soon after (unless you don't have no better place for your money at the time and think the stock can go up)? Has anyone actually looked at this to see if it can really make you much money? A couple interesting twists that come to mind involving options ... If you suspect the stock will go up just before the dividend date (perhaps because of people making a play -- does this price action seem to happen?), buy an option a while beforehand instead of the stock. Perhaps you could even use some kind of a spread with more than one option (not sure though -- too new to options). Combine the Dividend Trade with a covered call. Find the play, buy the stock before the dividend date, but instead of selling right after you get the dividend, write an at or in (perhapd deep) the money call to hopefully get called out, thus making a little extra (the option premium) on top of the dividend, and perhaps some price appreciation. Anyhow, take all the above with a coupla tons of salt since I'm a total newbie just learning about options and investing in general ... haven't even processed the paperwork to be able to trade options yet (but plan to make covered calls my cornerstone once I do). Like the thread, how you think, and your name though enthusiastic, keep it up!! --Bill Landis

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