This is a quick post on how I find dividend capture opportunities in the stock market. As part of my weekly process, I like to look for dividend stocks that distribute dividends in the next month (up to a month and a half usually). I put them in a watch list and then look for a buying opportunity.
Here is a quick gif on the process:
As you can see, it’s really easy: I chose the pre-defined screen (dividend capture) and then filter the stock score some more.
If you want to scan manually for dividend capture opportunities, The parameters are:
- At the money – out the money calls.
- Expiration date up to a month and a half from today.
- Stock score 8-10 (really good stocks)
- annualized return – 12.5% or more
- Open interest – 1000 or more
- Earning release after expiration
- dividends before expiration
After I get the list, I take out any sector or stock I don’t like (or have enough exposure to) and if the implied volatility is too low or dividend yield is too low I will skip that as well.
Here is the starting list for 4-Jan-2015:
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