Dividend Capture strategy involves buying a stock before dividend ex-date and sell it shortly after. The positive aspects of the strategy are:
- Short holding period – lower risk.
- Higher reward due to dividend and the ability to roll the capital faster.
The problem is that the market is efficient and will not hand free meals like that. My version requires more risk – I’m buying the stock 5-30 days before dividend and I sell call options against the stocks. This way my profit derived from two sources: (1) the option premium and (2) the dividends. And so I increase my chances of success.
This is a weekly segment where I share part of the scans I do in order to find stocks for my watchlist. Please do due diligence before entering a position.
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The dividend capture watch-list:
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