Options Trading News from PowerOptions
Summary: Podast for generating potential income from lucrative stock options positions. Includes commentary on covered calls, spreads, selling puts, etc.
I am sure that you’ve heard Costco Wholesale (COST) announced a special dividend of $7.00 per share, plus an additional increase of $0.05 to its regular quarterly dividend. The special $7.00 one time cash payment will be paid on May 26th, to those who are on record as owning shares on May 8th, 2017. What do we expect to happen when a special dividend is paid? Well, we expect the COST share price to fall -$7.00 to reflect the $7.00 one time payment. So, is this a Free Money investment if I were to buy an Out of the Money or At-the Money put option? Since the stock is going to fall the put would have to gain in price, correct? Even though I did not receive the dividend, my put would still gain and I would have a nice, juicy, leveraged profit…right? Not quite. In fact, not at all.... The post No Free Money with Special Dividend appeared first on PowerOptions Web Log.
PowerOptions has added many great tools for options traders over the years. Not all of them perfectly fit into the “strategy” navigation theme that we use. As a result, some of the best tools we offer have been obscured from … Continue reading →
Ever say to yourself, “I wonder how well my option strategy would work if it had been used over the last year, two years, etc.?” Well, at PowerOptions, we asked the same question and then developed an option “back-testing” tools … Continue reading →
Conventional Approach The conventional approach for protecting a portfolio against a large loss, research, buy-and-hold and diversification works well for singular events like an Enron or a Worldcom. However, for systematic market problems this approach can be very painful, as …Read more »