Dividends

>You actually make more by selling monthly cash-covered puts on stocks you'd consider "owning" and rolling the put each month to the next, collecting premium, benefitting from theta decay, and paying no margin interest OR dealing with added complexity of dividend payments on taxes.

can you explain that again to a retard?

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>you'll have to wait for it to recover.
Virtually all dividend payments are lost within the daily swings of the market. Dividend aristocrats beat the shit out of the S&P on growth as well. The whole “it’s included in the price of the stock” thing is a meme, the divvy cut is just a mechanism to keep traders from gaming the system.

That's not what I meant. When the company pays a dividend of a certain amount, like $1, they don't pay that out of their pocket they are paying it by literally subtracting $1 from the share price to pay back to shareholders.

Companies that can afford to pay dividends are usually not volatile and are relatively safe in terms of not blowing up your account...and if you just collect divs and write covered calls you can do OK with relatively low risk...but nobody is getting rich or making any significant money with this.

Yeah but if you can find companies that grow their dividends year over year by a good clip thats the power zone.

I have half s dozen quarterly paying stocks that I staggered to give me a dividend a month, and I have a handful of monthly paying stocks on top of that.

My goal is 100-200 a month In dividends by the end of this year.

Yes but the great thing about dividend stocks is that they cannot lie about a cash payment.

>can you explain that again to a retard?

Calls and Puts are options.
Options are derivatives with strike prices and expiration dates.
Option are valued by the difference between the strike price and market price of the underlying (usually a stock).
Options are sold in lots of 100 units. An option priced at $0.10 would cost $10 to buy.
As the expiration date nears, the price of a given option decreases. This is called "theta".
Theta is good when you sell options; bad when you buy them.

If you want to earn an "income", you can open a brokerage account and sell put options choosing "cash" rather than "margin" as your settlement.
The amount of options you can sell would be equal to how much of the stock you can buy if it were at a particular strike price.

Say the stock price is $25 and you have $50,000 in your account. You can do a cash buy of 2,000 shares OR you can sell 20 put options at the $25 strike price.

Risk is identical in both, but by selling puts you will be credited with the premium of the option. Let's say it was $1.50 - you would be credited with 20 x ($1.50 x 100) = $3,000.

If the stock is at or above 25.01 on the option expiration day, you keep the $3,000 and can repeat the process on a future expiration.

If the stock falls, say goes to $23, you will end up buying the stock at $25 and you will retain the credit of $3,000, so your per share cost basis would be ($25 - $1.5) = $23.50.

But are there screen shots?
How to tell an option?
Who buys options?

Sounds like pushing the accelerator really hard, sure you get to your destination quicker, but those otherwise avoidable obstacles just kills you.

Dividend stocks aren’t better (or worse) than non-dividend stocks. Companies pay a dividend/ buy back shares when they don’t have enough good investment opportunities. In theory dividend stocks and non-dividend stocks have the same risk adjusted expected return. If you want a dividend from a company that doesn’t pay a dividend you can just sell x% of your holdings each year.

Why cash and not margin?
What is the premulum of the put?
Are tobaccos a good buy considering the dividends, how down they are, and how they fare in market downturns?

That's why I hold my split share companies. 20% dividend in annual yield, and you collect every month. One of my favorites has not missed a payment in 15 years, and my second favorite missed a couple monthly payments during recessions in the last decade. Shares are cheap right now, and pay a set $0.10 every month.

Bump for good thread, actually learning shit

>But are there screen shots?
Probably. The process is similar among most brokerages. Most of them provide you with software or some kind of web interface.

>How to tell an option?
To trade options, you have to sign an options agreement with your brokerage and have trading enabled for them. They usually require that you have a margin account. There are several option trading levels, usually 1-5. The lower levels limit the types of option trades you can do and vary among brokerages.

Usually 2-3 is good enough. It will let you do the basics like covered call, cash covered put (identical to covered call in terms of risk), and maybe some basic spread trades.

>Who buys options?

Other traders or liquidity providers. Usually it is the latter on popular symbols like SPY. Look at the "open interest" for a given option to estimate liquidity. If OI is low, you'll end up eating a higher spread cost (more expensive to buy / lower sell price).

>Why cash and not margin?
A cash covered put is considered a "low risk" trade because it is identical to a covered call mathematically. If you do it on margin, it would be considered a naked put because you could potentially lose more than the cash value of your account. Anything you buy in cash, you can never lose more than the value of your account (other than fees/commissions).

>What is the premulum of the put?

The premium of an option (call or put) is he amount of money you are credited with when you "sell to open" an option.

When you "sell to open" a put, you are agreeing to buy 1 share of stock at the strike price for every option contract you sell IF the price of the stock is at or BELOW the strike price. This is equal to buying the stock, or going long.

When you "sell to open" a call, you are agreeing to sell 1 share of stock at the strike price for every option contract you sell IF the price of the stock is at or ABOVE the strike price. This is equal to shorting the stock, or going short.

Since options are sold in 100 unit lots, your accout must have enough cash in it to be able to buy/short AT LEAST 100 shares of a particular stock at a given strike to be able to do cash covered puts.

>Are tobaccos a good buy considering the dividends, how down they are, and how they fare in market downturns?

I view the market as more of a casino so your bet is as good as mine. I mostly trade VIX options. I wait for VIX to spike and load up on puts, and I use a portion of the profits to buy VIX calls when it is low. It usually spikes 2-3 times per year at least.

If you're able to get 20% yearly that's worth holding onto, but that's the benefit of playing the long game.

It's a split share corporation, look them up on wikipedia. Don't need to be long, it's just beneficial to buy more shares when the share price is low. The payout is constant and fixed, and the share price doesn't really grow over the year. If you can buy more shares when they are cheap you're laughing because they typically revert back to a regular trading range, your payout will not change, but the share price would creep back up to the historical range.

The companies I am in are Life & Banc Split Corp. and Dividend 15 Split Corp. I should be getting $20K on my $100K investment to buy other more traditional dividend growth stocks.