chinacat
Moderator
AAPL Long since 2006
Posts: 4,425
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Post by chinacat on Feb 6, 2020 6:05:15 GMT -8
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4aapl
Moderator
Posts: 3,598
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Post by 4aapl on Feb 6, 2020 10:01:58 GMT -8
Nice to be beating the indexes for a change. It will be even better if AAPL can hold that lead through the close.
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Post by Odd-Lot Richard on Feb 6, 2020 12:07:57 GMT -8
Looks like a lot of resistance at 325.
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Post by artman1033 on Feb 6, 2020 13:08:05 GMT -8
AAPL ALL TIME HIGH!$327.85All Time Highest Wednesday, January 29, 2020 intraday 24,862,885
shares traded today AAPL ALL TIME HIGHEST CLOSE!$325.21aaplinvestors.net/stats/rank/AAPL market CAP. +1.423 TRILLION AAPL ALL TIME HIGH market CAP. +1.423 TRILLION TODAY +$1.423 TRILLION
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,425
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Post by chinacat on Feb 6, 2020 13:49:24 GMT -8
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JDSoCal
Member
Aspiring oligarch
Posts: 4,181
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Post by JDSoCal on Feb 6, 2020 14:34:14 GMT -8
Just a shout out to AAPL options traders. How are you guys handling ex-div day for ITM spreads? Especially in Roth accounts. Are you closing out to avoid getting caught short by dividend predators?
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4aapl
Moderator
Posts: 3,598
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Post by 4aapl on Feb 6, 2020 17:24:56 GMT -8
Just a shout out to AAPL options traders. How are you guys handling ex-div day for ITM spreads? Especially in Roth accounts. Are you closing out to avoid getting caught short by dividend predators? I don't have any spreads right now (just some Jan '21 330 covered calls I wrote, instead of selling some shares now). But, I have had some in the past, and I have occasionally had the short side called away. The worst was a few years ago in August, where I had twice as many shares called away as I owned. I don't remember the exact number anymore, but lets say I had 30k of shares, and 500 spreads, so suddenly instead of being long 30k I was short 20k. It wasn't a big deal since I just bought back the shares. But it did create a tax event. The stock might have been around $86 or $89 at the time. The nice thing was that it reset the purchase date for all AAPL shares held in my taxable account, so now that a few years have passed, I can get rid of the previous 15 or so years of records. Silver lining? It's not bad to pay taxes on some of the gains, but it would have been nice to still have some of those shares with a cost basis of nearly nothing, and then use those for donations and such. Good luck. I don't have a good rule of thumb for when it's unlikely that they would get called away. It seems there should be some logic there, and there might be for some people. But there isn't for all. Some might take the ~77 cent dividend by throwing away 60 or 70 cents of value. With low commissions these days you'd expect people to just sell the option and buy the stock if they really want the dividend that much. But that whole logic thing isn't always there.
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,425
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Post by chinacat on Feb 6, 2020 19:38:48 GMT -8
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walterwhite
Member
"I am the one who knocks!"... Albuquerque, NM
Posts: 346
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Post by walterwhite on Feb 6, 2020 20:25:17 GMT -8
Just a shout out to AAPL options traders. How are you guys handling ex-div day for ITM spreads? Especially in Roth accounts. Are you closing out to avoid getting caught short by dividend predators? hmmm if it's in a tax-sheltered account (traditional or roth, doesn't matter) why wouldn't you just close the deep in the money spread? at this point, if it's really deep in the money, then it's kinda delta-neutral and sits like cash, doing nothing..... yes, there's risk of assignment on upper leg of a ditm spread if the divvy is higher than the remaining time premium on the upper leg.... the worst part is you'd be on the hook for the divvy too! (i assume you're taking about ditm long call spreads?)
if it's not very ditm....and there's a bunch time premium left on the upper leg, that shouldn't be much of a risk imho
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JDSoCal
Member
Aspiring oligarch
Posts: 4,181
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Post by JDSoCal on Feb 6, 2020 21:29:01 GMT -8
1/31 BTO AAPL FEB 14 312.5-315 @ 1.25 2/6 STC 2.00 So yeah I left .50 on the table. Honestly I hadn't traded AAPL options much for the last 4 years so my brain was a bit rusty on the ex-dividend thing. It is scary getting old. I think I've told the story before (have I ever mentioned here that I am getting older?) that I had a call spread that finished in the middle and I got assigned 1000 shares (now 7000) on margin. Scary AF at the time, but those shares have since more than quadrupled.
Long some TSLA option spreads and actually bot the dip on some shares this week. I know this cult ain't dead yet. Futures look red and AAPL on OpEx and Ex-Div Friday, might be a dip-buying day.
Hey, has anyone here ever held an ITM spread through ex-dividend day?
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Post by duckpins on Feb 6, 2020 21:31:19 GMT -8
Just a shout out to AAPL options traders. How are you guys handling ex-div day for ITM spreads? Especially in Roth accounts. Are you closing out to avoid getting caught short by dividend predators?
Your broker should tell you about that. If your spread is in the money, and the time value is less than the dividend...well I would expect it to be exercised right?
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JDSoCal
Member
Aspiring oligarch
Posts: 4,181
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Post by JDSoCal on Feb 6, 2020 21:37:49 GMT -8
Just a shout out to AAPL options traders. How are you guys handling ex-div day for ITM spreads? Especially in Roth accounts. Are you closing out to avoid getting caught short by dividend predators? Your broker should tell you about that. If your spread is in the money, and the time value is less than the dividend...well I would expect it to be exercised right? Yeah I got an e-mail from TD Ameritrade. I swear I'm going senile. I used to know this stuff.
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4aapl
Moderator
Posts: 3,598
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Post by 4aapl on Feb 6, 2020 22:20:48 GMT -8
Just a shout out to AAPL options traders. How are you guys handling ex-div day for ITM spreads? Especially in Roth accounts. Are you closing out to avoid getting caught short by dividend predators? Your broker should tell you about that. If your spread is in the money, and the time value is less than the dividend...well I would expect it to be exercised right? Yeah I got an e-mail from TD Ameritrade. I swear I'm going senile. I used to know this stuff. I used to get those emails a lot. They're just warnings, that you are potentially on the hook. Something about that the holders of the short side are randomly selected when someone calls it away. So it just depends on how many people cash them in early for the dividend. There were a lot of times where this wasn't an issue. But I had it once on SPY, and then once on AAPL, big time. And yes, along with suddenly being short the shares and worrying that the price would move against you, you also get the privilege of paying the dividend. (have I ever mentioned here that I am getting older?) Hanging out with the trail crew leaders from the TRTA, most of whom are in the 70+ club, this sometimes comes up. The reply is "It beats the alternative".
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Dave
Member
"It's tough to make predictions, especially about the future." Yogi Berra
Posts: 4,055
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Post by Dave on Feb 7, 2020 4:48:45 GMT -8
These uncertainties are why I stick with buying leaps, usually about a year out and usually a little out of the money. The return is usually very good and I have fewer sleepless nights.
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mark
fire starter
Posts: 1,545
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Post by mark on Feb 7, 2020 13:35:07 GMT -8
Just a shout out to AAPL options traders. How are you guys handling ex-div day for ITM spreads? Especially in Roth accounts. Are you closing out to avoid getting caught short by dividend predators? I had some Aug '15 115 puts assigned to me once. I sold the shares at a net loss shortly thereafter during one of the periodic downdrafts. Should have kept 'em! 😂 Since then, all the puts I've written have [sadly] expired worthless. I was also assigned some Jan '15 500 calls (pre-split), bought the stock to deliver instead of messing up my existing basis on all my lots. And, yes, I also paid the $0.47 dividend to the swiper on 11/13/2014. What did I learn from the latter case? Well, for one, I learned that I tend to hold on to my spreads for too long. Instead nowadays, I just place a GTC order to liquidate them when they are about 50 cents away from full value. No need to wait till the end to make sure I get full value out of them, it's just as easy rolling into new spreads. Now, even though I say "easy", this cycle I haven't done it yet. We haven't had a downdraft recently, and I generally like buying my spreads during/after a downdraft. I do have a bunch of 2021 puts I wrote, but they are very likely to expire worthless.
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mark
fire starter
Posts: 1,545
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Post by mark on Feb 7, 2020 13:43:54 GMT -8
Just a shout out to AAPL options traders. How are you guys handling ex-div day for ITM spreads? Especially in Roth accounts. Are you closing out to avoid getting caught short by dividend predators? Your broker should tell you about that. If your spread is in the money, and the time value is less than the dividend... well I would expect it to be exercised right? Yes, a rational investor would expect it to be exercised. However, I have experienced a number of times in the past that same expectation, and oddly enough, my options were NOT exercised. I'm guessing that there exist some irrational investors, or investors that don't pay close attention to their holdings (nor do their brokers), out there. I would guess that if there's an open interest of 1000 options worth exercising, maybe 800-900 will exercise when advantageous, so you have an 80-90% change of being assigned. That means you would have a 10-20% chance of NOT being assigned. In other words, you got lucky.
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