|
|
Post by lorenzo on Nov 3, 2013 12:29:57 GMT -5
"I get that people THINK it's something that traders do, but it seems like a myth. Like I said before, I've never heard of anyone who actually does this. And since I can't imagine there's any edge to be had there, I can't imagine anyone consistently does it." I've since retired, but when I used to trade, I often participated in dividend spreads. They are low risk and potentially high reward. They are still done, and I'm sure we'll see a huge spike in volume on any deep call line with decent open interest. There is actually pretty decent expected value in a lot of these trades, thus much different than buying stock before a split. The idea is to get short a lot of calls on lines with large oi- ideally multiples of the oi. This is done mainly by doing 0 delta deep call spreads and exercising the long side of the spread. This leaves you short calls and long stock. You then hope that you don't get assigned on as many calls as possible. Your risk is you don't cover the commission costs of the trade (which becomes substantially reduced per contract with large volume) with the dividend proceeds from unexercised calls. Your profit = div proceeds from unexercised calls - (commission of trade + call extrinsic value). Also, a good rule of thumb is if the put on the same line as your long call is worth less than the div payment, the call should be exercised. If for margin reasons, you can not exercise the call, then close it out or roll it up to a nonexercise call. This should be done on the day before the stock goes ex. Lorenzo, here's my original post on the topic from Friday. (see below) The strategy of writing calls that you and I describe isn't what they're taking about. They're talking about going long into a dividend unhedged with the belief that the stock won't fully correct for the dividend the following day. "Just out curiosity, do you know anyone who actually does this (Buy right before ex-dividend with the intention of dumping right after)? I've honestly never seen or even heard of any trading firms or individuals to ever do this. The only strategy I've heard of is firms who write a ton of way-in-the-money calls right before ex-dividend (with a 100% hedge) with the hope that a significant number of those calls will go unexercised and they can profit on every call they still have short the day after ex-dividend. There's definitely edge in that strategy, the only question is how many calls go unexercised. But where exactly is the edge in buying a stock right before a dividend when known dividends are always completely priced in?" Got it- sorry I thought it was in the context of div spreads. My bad. Don't forget to exercise! |
|
|
|
Post by electrobuzz on Nov 3, 2013 12:47:11 GMT -5
At some point the money returning from deferral has to exceed that which is being deferred, in which case it becomes another revenue source. Or at least it greatly mitigates the impact of money being deferred. Am I thinking right? Here is an example calculation to give you an idea matthew-lew.com/apple-new-revenue-deferral/ |
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,766
|
Post by Mav on Nov 3, 2013 14:00:34 GMT -5
The short answer is "it's complicated".
But generally speaking, assuming stable deferral rates but annual YOY unit growth from Apple, past deferrals will never catch up with present. Apple is pretty much always putting its financials at a disadvantage via revenue deferral. AFAIK, Apple has to with AppleCare and iTunes gift cards - but deferring as much as it does on iPhones, iPads and Macs, who knows.
Lew is right that if Apple's iPad/iPhone unit growth stagnates, then deferral impact is minimal. But iPad and iPhone both grew 20% YOY from fiscal '12. That scenario isn't playing out yet.
|
|
JDSoCal
Member
"Irrationally discounted"
Posts: 3,230 
|
Post by JDSoCal on Nov 3, 2013 14:25:59 GMT -5
At some point the money returning from deferral has to exceed that which is being deferred, in which case it becomes another revenue source. Or at least it greatly mitigates the impact of money being deferred. Am I thinking right? Here is an example calculation to give you an idea matthew-lew.com/apple-new-revenue-deferral/Good article. |
|
JDSoCal
Member
"Irrationally discounted"
Posts: 3,230
|
Post by JDSoCal on Nov 3, 2013 14:35:55 GMT -5
The short answer is "it's complicated". But generally speaking, assuming stable deferral rates but annual YOY unit growth from Apple, past deferrals will never catch up with present. Apple is pretty much always putting its financials at a disadvantage via revenue deferral. AFAIK, Apple has to with AppleCare and iTunes gift cards - but deferring as much as it does on iPhones, iPads and Macs, who knows. Lew is right that if Apple's iPad/iPhone unit growth stagnates, then deferral impact is minimal. But iPad and iPhone both grew 20% YOY from fiscal '12. That scenario isn't playing out yet. Seems to me the quarters that will benefit most are the "lull" quarters where the least units are sold, e.g., three quarters out from a big product release, wherein people are delaying purchases until product refresh (June?). Wouldn't this be the best place for net deferred revenue? Turd quarters with big sequential declines? Or are turd quarters already priced-in like any other quarters? |
|
chinacat
Moderator
AAPL Long since 2006
Posts: 2,339
|
Post by chinacat on Nov 3, 2013 16:43:25 GMT -5
I am intrigued by the charts in today's PED Column about iPad Air availability in the NYC area. 1) It gives a window of how complex it must be to decide how many of the different SKUs to ship to each location, and then tracking the required refresh rates 2) As PED asks, why does Sprint have such a different profile?...although I find ATT profile also very odd 3)Does the apparent popularity of the 128GB models herald the movement of the iPad from mainly a consumption device to greater productivity use, i.e., a "mini-truck" ? |
|
|
|
Post by infohunter on Nov 3, 2013 16:56:47 GMT -5
Lots of IPad Air commercials during the football games today, don't remember this many in the first weekend of a product release.
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,766
|
Post by Mav on Nov 3, 2013 16:57:30 GMT -5
Or the ridiculous markups people are...trying to get on the gray market? (Try again with the iPad mini retina, guys.)
|
|
|
|
Post by phoebear611 on Nov 3, 2013 16:59:51 GMT -5
I am intrigued by the charts in today's PED Column about iPad Air availability in the NYC area. 1) It gives a window of how complex it must be to decide how many of the different SKUs to ship to each location, and then tracking the required refresh rates 2) As PED asks, why does Sprint have such a different profile?...although I find ATT profile also very odd 3)Does the apparent popularity of the 128GB models herald the movement of the iPad from mainly a consumption device to greater productivity use, i.e., a "mini-truck" ? Our salesperson yesterday said that besides the 16GB which are bought for leisure by older folks using them as a reader or internet device - they simply want the cache of saying it is an AAPL iPad.....the second most popular one was the 128GB - at least in this New York store. I was very surprised by that but your comments have given me an epiphany....you may be onto something. |
|
|
|
Post by Red Shirted Ensign on Nov 3, 2013 17:09:46 GMT -5
I am intrigued by the charts in today's PED Column about iPad Air availability in the NYC area. 1) It gives a window of how complex it must be to decide how many of the different SKUs to ship to each location, and then tracking the required refresh rates 2) As PED asks, why does Sprint have such a different profile?...although I find ATT profile also very odd 3)Does the apparent popularity of the 128GB models herald the movement of the iPad from mainly a consumption device to greater productivity use, i.e., a "mini-truck" ? It's like trying to read a Ouija board....what does it mean? Some guesses: 1). The T-mobile 200 mg of free data may be drawing some buyers from AT&T. More than from Verizon and sprint. I also expect that AT&T had the lion's share of SKU's on launch week, being the most entrenched base. 2). Verizon looks about as I would expect. 3). Sprint is odd....their customer base may lend itself more to the storage capacities noted due to their unusual data plans. 4). We know 128 gig models are margin sweet. I wonder how many Apple made? Is this just a relatively few units selling out to early adapters.....or did they make plenty of them and this shows expanded demand for the iPad as the primary computing device, as you suggest? If the latter, pump out more Apple! |
|
|
|
Post by Red Shirted Ensign on Nov 3, 2013 17:12:26 GMT -5
Lots of IPad Air commercials during the football games today, don't remember this many in the first weekend of a product release. I liked the pencil commercial the first twenty times I saw it.....don't need to see it again, even though the great Walter White is the narrator! |
|
|
|
Post by phoebear611 on Nov 3, 2013 17:33:50 GMT -5
Lots of IPad Air commercials during the football games today, don't remember this many in the first weekend of a product release. I liked the pencil commercial the first twenty times I saw it.....don't need to see it again, even though the great Walter White is the narrator! You must be watching Patriots vs. Steelers...now they are pumping out the Surface commercials....every commercial is a tablet...geez! |
|
JDSoCal
Member
"Irrationally discounted"
Posts: 3,230
|
Post by JDSoCal on Nov 3, 2013 18:48:59 GMT -5
What do you guys think of the LeBron Samsung ad? I think it makes LeBron and his life look pretty appealing, but I'm not sure how Samsung fits into all of it.  LeBron is also one of the most polarizing people in the NBA, so not sure why they picked him. |
|
|
|
Post by Red Shirted Ensign on Nov 3, 2013 18:56:57 GMT -5
What do you guys think of the LeBron Samsung ad? I think it makes LeBron and his life look pretty appealing, but I'm not sure how Samsung fits into all of it. LeBron is also one of the most polarizing people in the NBA, so not sure why they picked him. I think you hit the key fact in their marketing plan. LeBron has a highly desirable perceived lifestyle for a specific demographic of ( I would guess) young males. If LeBron likes Samsing, it must be cool and they gotta have it... Will it work? Can Samsung be cool by association? As cool as Walter White.... |
|
|
|
Post by phoebear611 on Nov 3, 2013 19:05:18 GMT -5
What do you guys think of the LeBron Samsung ad? I think it makes LeBron and his life look pretty appealing, but I'm not sure how Samsung fits into all of it. LeBron is also one of the most polarizing people in the NBA, so not sure why they picked him. Like you said - he is immensely polarizing. When the Heat was playing for the Championship, there was a poll done and there were so many people rooting AGAINST Miami BECAUSE they didn't want to see LeBron win. So I'm not so sure how well they will do with him. |
|
|
|
Post by Red Shirted Ensign on Nov 3, 2013 19:19:59 GMT -5
What do you guys think of the LeBron Samsung ad? I think it makes LeBron and his life look pretty appealing, but I'm not sure how Samsung fits into all of it. LeBron is also one of the most polarizing people in the NBA, so not sure why they picked him. Like you said - he is immensely polarizing. When the Heat was playing for the Championship, there was a poll done and there were so many people rooting AGAINST Miami BECAUSE they didn't want to see LeBron win. So I'm not so sure how well they will do with him. My Seahawks are cooler than Lebron or anybody else.... |
|
|
|
Post by qualitywte on Nov 3, 2013 19:58:07 GMT -5
|
|
Mav
Member
[img style="max-width:100%;" alt=" " src="http://www.forumup.it/images/smiles/simo.gif"]
Posts: 10,766
|
Post by Mav on Nov 3, 2013 19:58:40 GMT -5
Makes me wonder why they didn't do preorders...
They have to have enough millions or they won't bother, maybe?
|
|
chinacat
Moderator
AAPL Long since 2006
Posts: 2,339
|
Post by chinacat on Nov 3, 2013 20:38:16 GMT -5
My Seahawks are cooler than Lebron or anybody else.... So that would be the "Alpha Quadrant Seahawks" to which you refer? ;D |
|
|
|
Post by nagrani on Nov 3, 2013 20:45:41 GMT -5
No preorders so people can stand in line.
|
|
