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Strategies & Market Trends : Calls and Puts for Income -- Ignore unavailable to you. Want to Upgrade?

To: tom pope who wrote (5600)	12/4/2012 4:28:29 PM
From: dealmakr	Read Replies (1) \| Respond to of 5891

Hi tom, Looking at the dividend from ORCL stock goes ex dividend on 12/12 and the options expire on 12/22. Not much of a cushion at either 31 or 32 and 10 days of market risk between those dates not counting the total days of market risk between today and options expiration. For .18/share of the dividend and the stock at 32.12 I think a lot of risk in NP selling if folks want to hit the door to capture LT cap gains or if other market disruptions occur. JMHO. Maybe Sir Lawrence needed a few cases of marine wax and polish for the boat and would explain the early payout without the tax man taking a bigger bite. Good trading dealmakr

To: tom pope who wrote (5600)

12/4/2012 6:04:32 PM

From: Bocor

Respond to of 5891

I'm not sure I understand why an impending special dividend should create an opportunity to profit from put sales

Well, I don't really see the opportunity in the article, but I think there ARE opportunities. For example, a stock like SDRL, that went ex-divvy today, lost close to 5% at it's low because the divvy is high, and they are distributing two divvy's in Dec., so selling Dec. puts, say the 36's, can give you less risk after the actual price has already been discounted.

Selling puts between now and the end of this month's cycle IMO should only be done on stocks you are prepared to own, even if only for a short period. Will there be a huge fiscal cliff sell off?

No one knows, and premiums I watch don't seem to reflect that risk.