| Date | Description | Amount | ROI | aROI | Profit |
| 2017-06-30 | Cash IWM @ $141.00 | -$141.00 | |||
| 2017-06-30 | Sell IWM 7/7 2017 $141.00 Put @ $1.27 | $1.27 | |||
| 2017-07-07 | If assigned at expiration | $141.00 | 0.90% | 46.97% | $1.27 |
| 2017-06-30 | Current value | $140.97 | 0.88% | 320.99% | $1.24 |
| 2017-06-30 | Buy and Hold | $140.97 | -0.02% | -- | -$0.03 |
Saturday, July 1, 2017
IWM -- New Dividend Play
I am anticipating IWM going ex-dividend sometime next week:
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IWM distribution will be on 7/6/2017. I don't understand your strategy since the IWM price will decline by the amount of the distribution (probably around $.65) on 7/6 (one day prior to options expiration) -- so you will not capture the distribution. Why not a covered call to capture the distribution? Per your discussion on your prior post, wouldn't that provide a higher potential annualized roi?
ReplyDeleteAt time I purchased the $41 put, the $41 call was paying $0.69 in extrinsic value. I was looking at the last quarterly dividend of about $0.39, so the put looked much better to me. It didn't occur to me that the July dividends are typically higher, or I probably would have done the call. OTOH, the call can be exercised early, taking away the dividend, while the put contains the dividend but is more likely to be exercised on expiration date when the dividend lowers the price below the strike price. I have to remember to check the put and call prices the night before it goes ex-dividend and compare them with the next morning. I'm still trying to figure out what happens to the dividend amount correction between put/call pricing overnight.
ReplyDeleteAccording to https://www.dividendinvestor.com/dividend-quote-new/?Symbol=IWM -- $0.609105.
ReplyDeleteIWM opened today at $139.93, so I attribute $.609105 ex-dividend to part of the decline from yesterday's $140.98 close and the remaining $.440895 to the decline in market value of IWM holdings.
ReplyDeleteThanks for showing the dividendinvestor.com link. I have added it to my Bookmarks for future use.