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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (3705)2/8/2010 3:13:42 PM
From: Chris Forte  Read Replies (1) | Respond to of 34328
 
Thanks for the options insight. Very interesting.

My favorite way to establish a position would go like this.
Find a dividend-paying stock you like at the current price. Sell near-the-money puts about one month forward. If you get assigned, hopefully you get it above break even (strike - premium). If it stays above the strike, you pocket the premium and repeat the process the following month. By definition, getting assigned this way means you acquired the stock on weakness.

If you were interested in buying McDonalds a little lower than it is now, say 400 shares, could you lay out a real time example of how you might buy MCD?



To: upanddown who wrote (3705)2/8/2010 4:22:51 PM
From: Steve Felix  Read Replies (1) | Respond to of 34328
 
"so little discussion here on using options to enhance returns on the dividend-payers favored here."

I agree and wish someone would share what they are doing in real time.

Edit - I see you already have responded to Chris. Thank you very much!


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