I like using dividend capture strategy with covered calls, because i can capture two sources of income: Dividend and premium.
Looking for dividend capture w/ options on $JPM $ACN $VZ $TK $COV $TRN & $CSCO The divs are in the coming 2 weeks, before earnings #options
— OptionSamurai (@OptionSamurai) September 28, 2014
This week I will focus on these stocks (but will continue to scan the market daily for new opportunities).
The list contains mostly quality stocks (ranked A in our stock scoring system) that the dividend distributed is before expiration and earning date. When trading, I set up the trade as a covered call (long stock, short call), This way i gain a slight edge when I capture the dividend. Also, I usually look for In The Money covered call – to increase my downside protection. If i’m assigned i’ll gain the premium earlier and roll the trade to another position. This way i’m able to generate high returns on annual basis. Looking at the charts i see that some of the stocks are in an uptrend and other are in a range. I will try to set the trade so the protection will be under a recent support.
I’m looking to set the position so my profit will be about 0.5% per week. And the premium HAS to be positive, So if the option is assigned i’ll still profit
Have a great trading week.
UPDATE:
$ACN looking for an in the money Covered call. Since there is a big dividend looking for a long expiration. example: http://t.co/jEIcBCuFeJ
— OptionSamurai (@OptionSamurai) September 29, 2014
